Are Uber drivers employees or independent contractors?

Are Uber drivers employees or independent contractors?: A discussion of Uber South Africa Technology Services (Pty) Ltd v National Union of Public Service and Allied Workers (NUPSAW) and others [2018] ZALCCT 1 (12 January 2018).

 

The respondents were drivers/partner drivers of Uber BV (which is based in The Netherlands). Uber SA, a local subsidiary company of Uber BV provided support functions. The drivers were “deactivated’by Uber BV. They refered an unfair dismissal case to the CCMA, contending that they had been unfairly dismissed by Uber SA. Uber SA raised apoint in limine to the effect that the drivers were not employees of Uber BV, let alone Uber SA.

 

The drivers argued that they were employees because Uber controlled them in a number of ways – viz: They were required to personally perform their tasks; and Uber controlled their conduct and regulated how they did their work through a system whereby ratings were allocated to them based on customer evaluations and numbers of cancelled trips, as well as controlling pricing and the number of drivers active in a particular location. The drivers argued that this showed that they were employees not independent contractors.

 

Uber SA argued that they were not the employers of the drivers because the drivers were not under any obligation to drive an Uber registered vehicle or use the Uber App, nor that they could compel a driver to drive the vehicle. They also emphasised that the drivers could choose where to drive and which passengers to pick up. Further, the driver could appoint another driver to drive in his stead and were not restricted to working for Uber. In addition, the drivers provided the tools of work – being the vehicle – and carried all the costs of trading. Lastly, the risk of profit or loss was born by the driver not Uber.

 

The commissioner found that he drivers were employees of Uber SA.

 

The case was taken on review to the Labour Court. The Labour Court held that the absence of a contractual arrangement of whatever form between the drivers and Uber SA was fatal to their claim to be employees. In addition, the commissioner had erred in conflating Uber SA and Uber BV and not recognising that they were distinct legal entities. The recruitment, screening and selection of drivers was done by Uber BV not Uber SA. There was no evidence that Uber SA was responsible for on-boarding or de-activating drivers – rather, this took place by electronic communication between the drivers and Uber BV. Further, Uber BV set the maximum fare rates and was responsible for the payment of the drivers.

Therefore, Uber SA was not the employer of the drivers. Uber SA merely provided support functions to Uber BV.

 

Accordingly, Uber SA’s objection to the jurisdiction of the CCMA was upheld and the commissioner’s ruling was overturned. The court held that it remained an open question as to whether Uber BV were the employers of the drivers or not. The drivers’ fatal mistake was sueing Uber SA and not Uber BV.