The full judgment is here: https://www.judiciary.gov.uk/wp-content/uploads/2016/10/asla...
Page 29 gives a good summary of the reasons that point towards the drivers being workers.
IR-35 is employment duck-typing. If it walks, talks, and quacks like an employee, then it's an employee and should be taxed as such, even if it claims it's an independent contractor.
Typically these contractors pay themselves a mixture of dividends and normal paye pay to minimise tax, and the gov is saying the dividends were never really dividends so they need to pay tax and ni on them including the employers ni.
Currently this is limited to specific staffing agencies who actively instructed new contractors to create a personal company but I don't think it will stop there.
I've long felt most contractors are well within ir35 and it has been tollerated. This may be ending.
The actual criteria are pretty complicated - see the guidance manual at https://www.gov.uk/hmrc-internal-manuals/employment-status-m... - but the essence of it is control ("does the boss have the right to tell the worker what, where, when and how to work?"), personal service/substitutability ("can the worker send someone else to do the job, instead of doing it himself?"), risk ("who is on the hook if something goes wrong?") and some other factors. Very fact-specific.
Incidentally, one of the standard features of traditional taxi drivers in the UK is that they don't set their fares, that being the responsibility of the local government. Uber drivers are licensed in the separate category of 'private hire', which has less stringent licensing (and the right for a firm to set its own fares) but a prohibition on picking up passengers by being hailed, and some other restrictions.
Very similar here in Germany, I guess. There is the term "Scheinselbstständig", which roughly translates to "fake self-employed". If you are formally self-employed but meet certain criteria, your "customer" (who is then considered to be more your employer than a customer) has certain obligations to you, and you have certain rights, which you can't easily trade away.
I got some letters about that and they asked me to prove that I was indeed self-employed. They didn't like the argument and concluded that I wasn't. The only thing that actually happened after a while is that I had to pay into the public retirement fund against my will. The "Deutsche Rentenversicherung" are seemingly the only people that care. From what I can tell there were no other obligations/rights that appeared after.
There are different parts of German law/government that are affected, retirement is only one of them (and just because one authority noticed/thinks you qualify doesn't automatically mean that the others do).
Tax avoidance (since payroll taxes on your salary weren't paid) is another angle.
For the employer, not paying their part in your social security contributions is similar to not paying you your full salary, and thus a criminal matter as well.
Ordinary self-employed people and sole traders pay nearly the same tax rates as employed people (National Insurance, a strange disguised tax, is at a different rate), but have many fewer rights, eg. no right to paid time off or sick pay.
The question in this case is whether Uber drivers are self-employed or not. Not as it turns out.
What on earth are you talking about... taking out dividends is not illegal, even for individual company owners. IR35 is about HMRC forcing self employed people to apply payroll taxes as if they were employed. Again, nothing to do with dividends.
Sure, I understand that. USA law is fuzzy in the same way. (The IRS 20 rules[1] are guidelines and not binary true false criteria usable for perfect machine learning classification.)
But for the sake of discussion purposes on HN, I'd like for you or anyone to play the role of general counsel for Uber and say exactly and concretely what they would need to do.
As I understand it, if the Uber driver were allowed to have someone else drive their car for Uber when they felt like it, and had the freedom (actual, not nominal) to decide which clients they'd like to take on, and had control of their pricing, then there would be no question it was actual self-employment.
* Give them basic rest breaks
* Give them basic holiday
* Pay them the minimum wage
Remember, they're not employees, they're workers.
[edit - I'd be very interested to know why this is downvoted, these are the things afaik that they are required to do for workers (who are distinct from employees)]
The positive I see in the so-called gig economy is far more flexibility in employing underutilised labour. If government increases the transaction costs of employing underutilised labour, then it will probably stop employing underutilised labour. It could easily be a net negative.
If there's an efficient way of working it out - i.e. keeping the transaction costs low - I'm not against regulating Uber as an employer. But it is a different form of working, and it's the kind of working that connected communication technology is best positioned to enable. It would be best if we didn't crush it under an assumption of regular employment.
It means that once you've been working for a given period of time you get a short period of (paid) time-off. A few lines of code in the scheduler to not assign work for 15 minutes to people in this position, and a corresponding credit in the billing system, would do.
The point applies more generally. I had a zero-hours contract with my university to teach very irregular hours on some IT training courses. I was entitled to holiday pay like every other worker. It accrued at a rate of something like one hour for every ten hours I worked, and was added to my pay.
This form of working isn't in any way new; piecework, home working, day labour and similar things have existed for as long as employment law has, and there are low friction solutions already in place to make meal breaks, holidays and minimum wage calculations work. The tribunal judges here specifically ruled on when Uber drivers are working (in licensed area with app switched on) so everything else is pretty straightforward from an implementation point of view.
That flexibility is nothing more than shifting risk from the employer, who is most able to handle it, to the employee, who is least able to handle it.
Simple, it's scaled for how long you work. 2 hours per.month would mean they also have to pay you for 2 hours 53 minutes per year of holiday.
Really, uber are not the only company that hires people for irregular work. This stuff has all been worked out a long time ago.
> That doesn't sound like sane business model -
It's just paying people to work for you, hardly a crazy business model.
But the money is paid for driving people around, not for being there. So where 53 minutes come from?
> It's just paying people to work for you, hardly a crazy business model.
Nope, it's paying people to work for you and also paying money just because. If somebody works for you for 2 hours and you have to pay for 2 hours and 53 minutes that's not paying for work.
Yup. The tribunal judge ruled that, as having drivers waiting around with the app turned on was an essential part of Uber's operations, their workers were doing work for Uber while waiting and in a position to take calls.
This is analogous to call centres: the operator can't just tell its workers that they're 'not at work' and not pay them when they're logged in and waiting for inbound calls.
Of course, mostly this matters for minimum wage calculations. As long as Uber have sent the driver a handful of trips in these two hours they'll have to pay no extra.
It's like I would call an electrician and he'd charge me for a month of work because he sat there for a month being available for my call, it's not his fault I called only now! Would you hire such an electrician? To me it sounds insane.
> As long as Uber have sent the driver a handful of trips in these two hours they'll have to pay no extra.
This makes even less sense. If "being available" has monetary value, as you claim, why this monetary value does not have to be paid regardless of additional monetary value of driving around? If, as you claim, being on call is a separate payable service, it should be charged in the same whatever happened after.
It sounds like this argument is not genuine and is just dragged in to arrive at predetermined conclusion about minimum wage, but as soon as this is not a concern, this argument is discarded completely.
If Uber wanted to stay in the UK market, what would be the minimum they would have to do so that the Uber drivers are considered "contractors"? Is it just letting the drivers set their own fares?
In other words, if sellers on ebay are not employees of ebay and programmers submitting apps to Apple iTunes Store are not employees of Apple, what does Uber need to do so they are considered a platform instead of an employer?
[1]https://www.gov.uk/government/publications/vat-notice-70025-...