Uber Hit?

October 31, 2016
FCB Workplace Law

We at FCB Workplace Law are closely watching the spread and penetration of the gig economy in Australia, and how it is influencing the traditional employment model.

Workers in the gig economy do not yet appear to be reflected in the labour market statistics1. However, the advent of labour market making platforms for all types of professionals, administration, payroll, cleaners, short term leasing of property or vehicles and other services means it is now fast, easy and convenient to micro-outsource a significant number of tasks and jobs.  In many cases, the task or job can be outsourced to an off-shore provider who couldn’t care less about domestic employment conditions and the customer will expect to benefit from a lower labour cost input for that task or job.  Other, location based jobs such as driving or cleaning cannot be performed elsewhere, and the issue is whether letting the market set the price of that task or job is fair, and what its impact is having on the traditional labour market in Australia.

UK development

Last Friday, 28 October 2016 the UK Employment Tribunal2 deemed a small group of Uber partner-drivers to be employed as workers by Uber, and as such those partner-drivers were entitled to the UK minimum wage and other minimum entitlements.  Uber immediately announced they would appeal3.  While that decision turned on the specific laws defining workers in the UK, which are not identical to Australian laws, it does beg the question of how a similar claim would play out in Australia.

For instance, the Uber model does not oblige a driver to switch on the app or log in to work at specific times. The driver retains the discretion as to when to work, which is more a characteristic of a self-employed person than an employee. On the other hand, Uber imposes rules on drivers about the fare that is to be charged and the route to be taken on a particular trip, which are more indicative of an employment relationship.

Of interest is that the UK tribunal views Uber as a business which sells rides, not technology – if that is correct (which Uber no doubt rejects) does that mean a business that matches programmers, lawyers or engineers with clients could be responsible for the quality of the output?  If a business owner books a cleaner via an app to come and is clean the workplace and an item is broken, who is liable to replace the item?

Questions for the Australian market

If the platform or app derives its income from the skilled labour provided to a customer, then a real issue exists as to how to characterize the relationship between the person providing the skilled labour, and the business providing access to the platform or app.   While Uber and other apps are offering new pastures for work in Australia, the legal principles involved have not as yet been applied in such a way as to offer clear guidance on whether to regard such workers as employees or self-employed, and if so on what terms.

This is very much a stay-tuned time for Australian employment law – and if you are a business operating in the gig economy you would benefit from taking advice on how well your business model is equipped to comply with Australian work rules.

By the way – the author is a satisfied Uber passenger.


[1] P Lewis, http://theconversation.com/australias-gig-economy-yet-to-register-in-employment-numbers-45495; see also ABS 6333.0 – Characteristics of Employment, Australia, August 2015

[2] https://www.judiciary.gov.uk/wp-content/uploads/2016/10/aslam-and-farrar-v-uber-employment-judgment-20161028.pdf

[3] https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status