Uber Loses U.K. Court Appeal Over Drivers’ Rights

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A court has reaffirmed a ruling made last year that Uber must treat its U.K. fleet of drivers as workers, entitling them to benefits, breaks and the national minimum wage.

In an appeal, the ride-sharing company argued its drivers are self-employed, excluding them from the rights that are tied to permanent workers. The court rejected their argument, upholding an October 2016 employment tribunal ruling.

The case was brought forward by two Uber drivers—one current, one former—saying Uber was exploiting its drivers by denying them basic employment protections.

“Over the last year we have made a number of changes to our app to give drivers even more control,” said Tom Elvidge, Uber U.K.’s Acting General Manager, in a statement. “We’ve also invested in things like access to illness and injury cover and we’ll keep introducing changes to make driving with Uber even better.”

Elvidge said Uber intends to appeal the decision as the company classifies drivers as independent contractors.

“Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed,” he added.

The original ruling only applied to the nearly two dozen drivers in the initial case, but the latest court decision will set a precedent for the more than 50,000 drivers in the U.K. But for the 40,000 Uber drivers in London, they may soon find themselves without work.

Uber is currently fighting to keep operating in London after the local transportation authorities stripped the ride-sharing app of its license. In September, Transport for London found Uber is “not fit and proper” to hold a private hire operator license in the city.

The battles across the pond are challenging Uber’s new CEO Dara Khosrowshahi in his first few months at the helm of the company.

In his first public conversation since becoming the chief executive, Khosrowshahi said he was in talks with London’s regulators. Uber must gain favor with the London government if it wants to continue to serve 3.5 million riders in the city.

Keeping international regulators happy will be key for Uber as the company faces increased competition in the U.S. from rival ride-sharing app Lyft.

“I don’t see the U.S. as being a particularly profitable market for the next six months,” he said at the New York Times DealBook conference yesterday.

Despite the lost dollars in the U.S. market, Khosrowshahi is feeling more optimistic about the future of the company. Uber is headed for an IPO in 2019, and working to close a multi-billion dollar deal with SoftBank.

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