What Uber’s loss means for Britain

The latest ruling on Uber Technologies Inc is good for drivers and city dwellers alike. But it shouldn’t be the last word on the matter.
The UK Supreme Court determined that Uber drivers should be classified as “workers,” entitling them to rights like the minimum wage, holiday pay and rest breaks. It’s the culmination of a five-year court battle, and has broader implications for the gig economy as a whole.
As others seek the same status that the court afforded the 25 drivers in the case, Uber’s costs will increase. The classification means the company could owe $1.3 billion in unpaid taxes alone, Bloomberg Intelligence analyst Aitor Ortiz estimates. Such costs are bound to be passed onto customers of not just Uber but also those of other ridehailing companies in the UK, such as Ola, Bolt and Free Now. In short, ridehailing will become more expensive. But that’s no bad thing.
Price wars have often made the practice artificially cheap, even in London, which has been one of the industry’s most profitable markets. Higher prices for rides may push people back towards cash-strapped public transport and decrease road congestion and pollution. A 2019 study by the San Francisco County Transportation Authority and the University of Kentucky found that between 2010 and 2016, the period when Uber and rival Lyft Inc started operating in the city, weekday traffic (“vehicle hours of delay”) increased by 62%. Congestion would otherwise have increased by just 22%.
Uber has long pitched itself as a side hustle for people looking to top up their income. But the reality has often been different: For plenty of drivers, the app offers their main source of income. It makes sense that their primary job should come with basic employee protections.
But there are also people who do only want to drive on the side. Heavy-handed, one-size-fits-all employment laws are bound to make that harder. The UK legal system means this ruling sets an important precedent that will be followed by other gig workers seeking better protections, but it isn’t a new regulation per se. Moving forward, a hybrid regulatory environment — which protects workers but still offers flexibility, and levies taxes by classifying workers appropriately — would be better.

—Bloomberg