'Uber is obligated to institute a labour contract with drivers'

A Dutch court ruled on Monday that Uber drivers in the Netherlands are effectively under an employment contract, in a fresh blow for the US ride-hailing giant’s gig-economy model.

The judgment, in a case brought by a Dutch union, comes months after a similar UK court ruling on Uber drivers’ rights led to the San Francisco-based firm agreeing a world-first union deal in Britain.

“The legal relationship between Uber and these drivers meets all the characteristics of an employment contract,” and drivers are covered by a collective labour agreement for taxi drivers, the Amsterdam District Court said in a statement.

“This means that Uber is obligated to institute a labour contract with drivers… and therefore means these drivers are entitled to backpay in certain circumstances,” the court said.

The umbrella Dutch labour union FNV dragged Uber to court in December, saying that taxi drivers and the company shared a labour agreement and Uber drivers often earned less than the minimum wage.

The judges also ordered Uber to pay 50,000 ($59,000) in damages to the FNV for not adhering to a collective labour agreement.

Uber, which insists it simply provides a technical platform to link independent drivers and customers, said it would appeal the ruling.

“We are disappointed with this decision because we know that the overwhelming majority of drivers wish to remain independent,” Maurits Schoenfeld, Uber’s Northern Europe general manager, said in a statement emailed to AFP.

“Drivers don’t want to give up their freedom to choose if, when and where to work,” Schoenfeld said.

Legal battles

In court papers, Uber said: “A vastly diverse group of more than 10,000 drivers could not be turned into employees all at once.”

A rapidly growing business, there were more than 5,200 Uber drivers in Amsterdam alone by the end of 2019, according to study by Maastricht University.

Uber in March in a world first said it was granting its UK drivers worker status, with benefits including a minimum wage, following a Supreme Court ruling.

But elsewhere it has strongly resisted such a sea change in its business model, arguing that its drivers are self-employed freelancers.

In California, a voter-approved referendum that lets many “gig workers” be treated as independent contractors was ruled unconstitutional in August.

The labour legislation — heavily backed by Uber, Lyft and other app-based, on demand services — had effectively overturned a California law requiring them to reclassify their drivers and provide employee benefits.

Yet, a Californian superior court said the law violated the state’s Constitution because it “limits the power of a… legislature to define app-based drivers as workers subject to workers’ compensation law.”

Uber has also faced strong resistance from traditional taxi services.

A French court on Friday ordered Uber to pay damages to taxi drivers whose business suffered from unlicensed competitors.

Uber in August reported a profit of $1.1 billion (931 million euros) in the second quarter and said its pandemic-stalled business was showing signs of recovery.