Just when you think that things fo Uber couldn’t get any worse, something else comes up that pushes the company into even more trouble. Uber Technologies Inc. has suffered another setback by a British court on Friday. The decision, reaffirmed, states that the company must give its drivers employee rights such as paid vacation.
This ruling from the Employment Appeal Tribunal could significantly increase the operating costs for Uber in the U.K., according to a report from The Wall Street Journal. Right now, Uber has about 50,000 drivers who work as independent contractor, and is also trying to resolve the issue of losing its operating license in London.
Tom Elvidge, Acting general manager for Uber’s U.K. Operations, says that “Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed.”
The ruling sets a dangerous precedent for Uber and endangers its business model globally. The issue here is that all drivers that the company works with are independent contractors. In other words, they’re self-employed and Uber doesn’t offer them benefits such as paid vacation. Uber is already suffering from employment lawsuits in other countries including Canada and U.S., and potentially weakening its chance of victory in those lawsuits.
In Uber’s defense, the company states that the decision was based on inaccurate information about its policies. Uber further adds that it plans to appeal to England’s Court of Appeal, potentially prolonging things that could turn into a long fight. If it loses, the last chance the company has is U.K.’s Supreme Court. The company has a long fight ahead that’s not only in the U.K. but globally.
Uber’s CEO Dara Khosrowshahi recently said that there’s a good chance he can take Uber Technologies Inc. public in the next 18 months with the help from a SoftBank investment. The things that are piling on top of Uber isn’t setting in on a path to have a good IPO within the next 18 months. 2017 has been a tough year for the ride sharing company, perhaps 2018 and beyond could prove to be better.
