In what will have a definitively huge impact on its business model, ride-hailing company Uber this Friday lost a six-year-long legal battle with its drivers in the U.K.
In a unanimous ruling, U.K’s Supreme Court finally said on Friday that Uber’s drivers are indeed workers with the company and not just freelance third-party service providers.
This had hitherto been the case since the ubiquitous tech business model came into existence. But all that is about to change with the new ruling.
With the Supreme Court’s ruling, Uber UK will now have to pay its drivers a minimum of £8.72 ($12.19) which is the country’s minimum wage for those aged 25 and above.
Additionally, the Supreme Court also ruled that Uber’s drivers will be considered as working as long as they are logged into the app and waiting for, or carrying out a ride and not just when they have been booked.
Along with the above, Uber will also have to pay some of its British drivers compensation for treating them as partners rather than workers over the last couple of years.
Unfortunately, the company is claiming that the rule affects only the two workers who had initiated the matter but that may not be so as lawyers to the claimants will be advocating for compensation on behalf of thousands more, a ruling which may bring the ride-hailing company to paying as much as £12,000 ($16,790) per driver.
The ruling certainly brings with it a possible far-reaching impact on the ride-hailing business not just in the United Kingdom, but all over the world where the company operates.
Regardless of the ruling, however, one thing is certain; the company will most definitely not fold its hands and watch its revenue model ruined. Some have opined that Uber may be looking to exit the U.K. with this new ruling but it sure will not go down without a fight.
Possible Local Impact
With a local presence in as many as 80 countries and more than 700 cities around the world, the U.K. ruling will certainly have a global impact in each of the countries the company operates in and this includes Nigeria.
For a long while, the tech world with its dynamism and the seamless possibilities presented has been a subject of scrutiny for many onlookers, both individuals and governments alike in a bid to understanding its dynamics and how the new world of possibilities can be mined.
Given that Uber’s operation as well as others in the e-ride hailing business has been under one form of government scrutiny or another in the past few years specifically in Lagos, Nigeria’s commercial capital, this may be a bad sign for the company.
The Lagos State government had in August last year imposed a N20 levy known as road improvement fund on each trip a driver makes in a day on all ride-hailing platforms operating in the state and this may just signal an opportunity for more revenue cutting drive especially from drivers.
Unfortunately, Nigeria has a long history of inadequate labor laws which gives many employers the ability to exploit workers and the tech world is not exempted.
The coming months will certainly be eventful for the ride-hailing company as it seeks to protect its business model at all costs.
