A London tribunal's ruling last week that Uber drivers aren't self-employed was hailed by the company's critics. The court upheld a finding that Uber resorted to "fictions" and "twisted language" in denying its obligations as an employer, and that its claim to be linking 30,000 small businesses to their customers was "faintly ridiculous."
Yet the judgment doesn't settle the matter. The legal fight will continue in Britain, as in many other jurisdictions. This is what happens when courts are asked to apply outdated laws to a rapidly changing labor market.
A San Francisco judge presiding over a similar case put it well: The jury is being "handed a square peg and asked to choose between two round holes."
The crucial question is for lawmakers to resolve. Uber's drivers aren't employees in the old-fashioned sense — and they aren't independent contractors in the old-fashioned sense, either. This is a new employment relationship. It needs to be regulated accordingly.
The U.K. government, in fact, earlier this year proposed a new employment status of "dependent contractor," a category that Canada and some other jurisdictions already have. The idea is that the absence of a requirement to perform work — a standard feature of the gig-economy model — shouldn't automatically exclude employment rights. But the dependent contractor's looser relationship with the platform provider suggests a more limited set of obligations.
What dependent-contractor status means, and the rights it would confer, still needs to be worked out, so the idea won't bring disagreement to an end. But it puts the main points of contention in the right place — in the realm of politics, not litigation.
Uber's method of barging into markets and deeming itself exempt from existing rules has made it many enemies. Yet it can hardly be considered a failure — certainly not from the customer's point of view. Its ferocious innovation, and that of other platform enterprises, has left employment law behind. The rules need to catch up, preferably in ways that don't squelch the benefits.
FROM AN EDITORIAL ON BLOOMBERG VIEW
