Are Uber workers employees? NZ edition

The title of my post is partly click-bait. I will say right at the outset that there is no blanket declaration about the status of gig workers or even Uber employees in the instant case. Instead, the court was deciding the status of specific individuals.

The case in question is E Tu Incorporated & Anr. v Rasier Ops BV & Ors and it was decided by the Employment Court of new Zealand. It appears that the court relied heavily on statutory construction to decide this case. (It followed a purposive approach, stating that ‘such legislation must be approached in a way which recognises and supports the broader legislative purpose, rather than undermines its place within the fabric of society…They reflect a statutory recognition of vulnerability based on an inherent inequality of bargaining power, that certain workers are unable to adequately protect themselves by contract from being underpaid or not paid at all for their work, from being unfairly treated in their work and from being overworked’ [para 8].)

This probably followed from the fact that the court framed the question that ‘needed to be asked and answered’ as whether s 6 (the relevant provision of the statute), ‘construed purposively, was intended to apply to the relationship at issue when viewed realistically’.

I don’t think this outcome is reflective of what is going on in the gig economy at all.

The case of platforms does not exactly fit this picture of vulnerable workers that the court has painted. For instance, drivers on Uber make a choice to take on a different work model. Sometimes they take on ‘work’ (or jobs) from more than one such company (so in this example, it could be Lyft and Ola).

The counsel for Uber seems to have argued that the drivers were building their own businenss. The court dismissed that line of argument in the following paragraphs:

It can hardly be said to reflect a driver’s ability to build their own business, particularly where the driver is constrained in their ability to establish an ongoing relationship with a rider and the reduction comes out of what would otherwise be paid to the driver.

[para 38]

There was no evidence that the drivers advertised or promoted their own business via the work they did while logged in to the Uber App. They were not free to organise their work other than in respect of when and if they logged in to the Uber App and the rides they accepted or declined, which (as I have already observed) were choices made under the shadow of significant adverse consequences, determined and unilaterally imposed by Uber.

These features of the relationship stand in marked contrast to those that usually apply to a person who operates their own business. A person who operates their own business is generally able to run it as they see fit, including, for example, by setting prices, marketing, service standards, the way in which complaints are dealt with and bringing in substitute labour.

[paras 49 and 50]

In this case I am not satisfied that the evidence as to the provision of a vehicle is other than neutral. I do not consider that the fact that each of the plaintiff drivers provided their own vehicle and smartphone reflects the sort of investment which might.

[para 69]

Even if the court’s reasoning makes sense for traditional businesses, gig workers are clearly not operating as traditional businesses.

Mazzoni and Schuler argue, in a forthcoming paper, that Uber drivers (and others taking on work from platforms) are really entrepreneurs because of, amongst other things, of the uncertainty they take on. They choose a work situation where they are not bound on employment terms to any on employer. Instead, they opt for a flexible situation where they decide when to take on jobs and this involves some uncertainty in terms of how much they will earn each day/ week/ month. (This work is forthcoming later this year so look out for it!) Here we have to remember that the term entrepreneur is wider than that of a business owner.

Eric Crampton argued on these lines on Twitter:

A driver is on three apps simultaneously, picking the jobs that best suit. Later that night, the driver is on standby with those apps, watching movies at home, but ready to drive if a plum fare comes up. Which platform is the employer?

In a subsequent tweet, he added:

If the driver is sitting at home at leisure, ready to take a fare if a plum one turns up on one of three platforms, but otherwise watching movies, which if any of the three should have to pay minimum wage for being on standby? What do you think happens to flexibility if any are?

I think these questions support Mazzoni and Schuler’s argument.

The court has addressed the flexibility issue very unsatisfactorily by noting that even though ‘a number of the classic hallmarks of a traditional employment relationship are missing’, there was ‘evidence about the high level of control and subordination’ by Uber (para 32). The court bases this assessment about Uber’s high level of control on the fact that ‘access to the App is nontransferrable’, that Uber decides the cost of each trip and charges that to the customer (paras 33 and 34), and that drivers had to comply with Uber’s ‘community guidelines’ (para 41).

The court dismissed the issue of a gig economy worker being able to log in and choose from jobs on multiple platforms by simply comparing with a situation where an employee holds multiple part-time jobs (para 72). This is inadequate analysis.

The discussion of overseas authorities is also wanting. There is only a mention of relevant cases, some in the footnotes, with no engagement with the substance of those cases.

My own take is that gig workers are not employees but government can decide to craft laws that protect them in different ways. There are some efforts in this direction in Australia.


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