In a major setback for Uber, a French court has ruled that Uber drivers will not be considered as self employed but will instead be counted as employees of the company. This decision can completely change the way Uber operates, forcing the company to set minimum wages for its drivers and providing other benefits like paid leaves. This would, unarguably, have a major impact on the company’s already loss-making balance sheet.
The decision came from Cour de Cassation, which said that drivers who use the Uber platform to provide rides can not be labelled as self employed contractors since they could not build their own clientele or set their own fares and prices. Thus, they must be regarded as employees of Uber, since when they sign up, a relationship of subordination is built between the two parties.
“The driver does not provide services as a self-employed person, but as an employee,” said the court in a statement, upholding the decision taken by a court of appeal a while back.
It is fair to assume that the ruling hasn’t gone down well with Uber. Not only will Uber be obliged to provide employee benefits, it will also have to eventually end up paying much more in taxes. All of this will make it harder for the company to operated in France.
Back home too, things aren’t shiny and bright for Uber. A similar ruling can be expected for the company in its home turf California, wherein a new law has made it harder for people working for companies like Uber to claim the role of ‘self employed contractor’. Thus, Uber might have more employees on its hand than it would like to.
The company has said that this decision would not lead to automatic reclassification of all the drivers on the platform, saying “Drivers value Uber because of the independence and freedom to use our app if, when and where they want.”
