Uber is awaiting the ruling of the United Kingdom Supreme Court on whether the drivers are workers

LONDON – Uber’s problems in the UK have not ended, despite regaining its London operating license.

The travel company is awaiting a major ruling from the country’s higher court on whether its drivers should be classified as workers rather than independent contractors.

It’s a case that reflects Uber’s fight with California regulators over drivers’ labor rights last year. A loss to the company could jeopardize its business model and have wider ramifications for the so-called concert economy.

Here’s what you need to know.

It all started with a ruling by the UK Labor Court in 2016.

The court ruled in favor of a group of Uber drivers, led by Yaseen Aslam and James Farrar, who claimed to be employees employed by Uber and therefore entitled to rights such as the minimum wage, holiday pay and rest breaks.

Uber insists that its drivers are self-employed, a classification that gives them minimal protection. He does not want them to be treated as workers, as this would reduce the flexible way of working for which his service has become known and would lead to higher costs for the company.

The company lost every appeal against the initial decision of the employment tribunal in the lower courts of the United Kingdom and therefore appealed to the Supreme Court as a final solution.

Uber says it has improved over time in the treatment of its drivers, introducing benefits such as insurance to cover illness or accidents and maternity and paternity payments. But lawyers representing drivers say the company’s relationship with drivers means they should be paid a minimum wage.

Uber is not the only platform that reclassifies drivers as workers. Free Now, a taxi app jointly owned by Daimler and BMW, said most of its drivers use more services and “enjoy the flexibility that comes with it.”

“This, by its very nature, would make it very difficult and not necessarily beneficial for them to change their status from contractors to workers or employees,” a Free Now spokesman told CNBC.

The Supreme Court will issue its verdict on Friday around 9:45 a.m. London time. The decision will be broadcast live on the court’s website.

Friday’s ruling could have huge long-term consequences for Uber and the UK concert economy, which has an estimated workforce of 5.5 million people.

For Uber, a loss would mean the company would have to go back to the UK employment tribunal to determine compensation for drivers.

What will matter in the Supreme Court ruling is not only whether drivers should be classified as workers, but also in what scenarios they work. For example, does a driver work as soon as he opens his application or only after picking up his passengers? That’s what the judges are debating.

Pinar Ozcan, a professor of entrepreneurship and innovation at Oxford’s Saïd School of Business, told CNBC last year that the case was an example of “another confrontation of the power struggle between the platforms and their members.”

The world has changed since Uber initially lost its court case. The coronavirus pandemic has had an effect on drivers, and demand has fallen amid the ongoing global health crisis. Meanwhile, couriers for Uber Eats and other dining apps are seen today by many as essential workers, delivering food to people staying at home.

The pandemic has led to an “acceleration of concert work,” according to Ozcan, with people losing their jobs as a result of blockade measures.

“I think we will see more people wondering how we should redefine the terms of the contest and make them so that they remain attractive to members (platforms),” she said.

“Of course, the platforms will fight back because they are really reducing their revenue,” Ozcan said. “That power struggle will increase, if anything happens, because more people will be attracted to concert work.”

Uber won a battle with the state of California last year, which introduced new legislation in an attempt to classify application-based taxi drivers as employees. But voters supported a voting measure called Proposition 22, which allowed companies such as Uber and Lyft to continue to treat them as independent contractors.

Uber is promoting a “third way” for the employment situation of gig workers, which would provide drivers with some protection, but still provide flexible work.

The company shared proposals for such a model with the EU on Monday, ahead of a review by the European Commission on concert economy platforms. One measure Uber has suggested is the idea of ​​benefit funds that could be used by workers for things like health and leisure insurance.