I was "self-employed" ("Freiberufler") and working for a US startup 100% of my billable hours. They hadn't formed a company in Germany at that point, so I just send them a bill and paid the employer and employee part of my health insurance.

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.

I'm not a lawyer, but what I remember from talking with self-employed family members:

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.

In the UK (and also in, for example, Poland) self-employed people pay much lower taxes than the employees - hence we're all very happy to trade away our rights.

I believe you are thinking of people who set up companies and pay themselves through dividends (which have a much lower tax rate), which is now (highly controversially) illegal -- search for "IR35".

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.

> pay themselves through dividends (which have a much lower tax rate), which is now (highly controversially) illegal

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.

But that has a social impact. You might be chuckling to yourself over how much NI you're not paying, but if you are injured the NHS will still treat you, and the money has to come from somewhere.

That's interesting, in the US it is the opposite, although you might be able to write off certain things as expenses so your overall taxable income is lower.