Ride-hailing gets rough

Uber Faces UK-Type Storm In South Africa As Drivers Chase Class Action

By  |  February 23, 2021

On Friday, February 19, the UK Supreme Court made a staggering call when it upheld a ruling that Uber drivers should be classified as workers (actual company employees) and not independent contractors.

Now, Leigh Day, the London-based law firm that represented the UK Uber drivers in that lawsuit, has teamed up with Johannesburg-based Mbuyisa Moleele Attorneys on another Uber case in South Africa.

Interestingly, just for the sake of information, both law firms also paired up to form the legal team that achieved the first two settlements in the “silicosis litigation” on behalf of gold miners in South Africa.

However, the matter that is currently heating up is the fact that they have launched a class action lawsuit against Uber South Africa, seeking to support the company’s thousands of local drivers. The case will be filed in the labour court in Johannesburg against Uber BV in the Netherlands and Uber South Africa on behalf of the drivers.

“The Uber claim follows a decision by the UK supreme court on Friday, 19 February that Uber drivers should be legally classified as workers rather than independent contractors, and as such are entitled to similar benefits,” the statement said. 

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“In the UK case, the key issue was whether drivers contract with passengers using Uber as an agent, or alternatively that drivers are working for Uber. The conclusion of the supreme court was that they work for Uber. Even though Uber’s lawyers had drafted agreements giving the impression that Uber was merely an agent, the court ruled that the true position was that under employment legislation, Uber has control over the way in which drivers deliver their services.”

The class action lawsuit also cites key similarities between South African legislation relating to employment status and rights (i.e the Labour Relations Act and the Basic Conditions of Employment Act) and UK employment law.

It stresses that Uber operates an identical system in both the UK and South Africa, with drivers using an app, which the UK supreme court concluded resulted in drivers’ work being “tightly defined and controlled” by Uber.

Uber has been operating in South Africa since 2013 and as of 2019, the platform claimed more than  “13,000 driver-partners” in the country, enabling people to get around cities through its signature app that connects drivers in vehicles with passengers, while Uber earns a commission of 25 percent of the fare paid for every trip.

Since launching in San Francisco in 2010, Uber has taken the service to more than 10,000 cities worldwide. But its preferred asset-light business model has over the years become a sticking point.

Uber handpicks vetted drivers in possession of suitable vehicles and onboards them on its platform. But in less developed markets (as in South Africa), economic constraints and acute unemployment make vehicle ownerships untenable. Hence, very few Uber drivers in South Africa (less than 10 percent, by some estimates) own the vehicles with which they offer rides on the platform.

There, the most common practice is for Uber drivers to hire vehicles via car rentals or to work as drivers for Uber partners. These partners are entities with the means to own or finance vehicles, some of them even operate entire fleets and Uber encourages drivers to work for them.

The problem? It does look like a helping hand to drivers but, in many cases, it actually puts the drivers who go through much of the toil at a huge disadvantage.

“Typically, owners set drivers’ weekly “targets,” ranging from USD 190.00 to USD 230.00, which drivers must pay them before they can start earning money themselves. Some owners are registered with Uber and pay out earnings to their drivers, minus these deductions; in other cases, the drivers are registered themselves and must deduct rental fees from what they earn,” reads a 2018 piece on The Atlantic authored by Kimon de Gree.

“Either way, drivers must pay for their gas and cell phone data. This leaves little over for drivers, many of whom work 60-hour weeks or longer. With rising insurance premiums and competition for riders, many owners say that the model is no longer working for them either,” reads another portion of the piece.

Essentially, the argument is that drivers in South Africa tend to work full-time on the Uber platform and their work for Uber is equivalent to full-time employment, and not just a way of earning supplementary income. And there’s discontentment over the fact that these drivers do not benefit from the associated protections and perks of full-time employment.

In the statement that announced the imminent class action suit in South Africa, it was highlighted that the model described above, coupled with the fact that the Competition Commission found that some drivers earn less than the minimum wage after all those deductions and expenses, implies that Uber drivers in South Africa work incredibly long hours and still struggle to make ends meet, in some cases.

“The supreme court recognised similar difficulties faced by drivers in the UK case by stating that in practice, the only way in which drivers could increase their earnings was by working longer hours while constantly meeting Uber’s measures of performance,” the statement reads.

Zanele Mbuyisa of Mbuyisa Moleele Attorneys said: “Uber’s argument that it is just an app does not hold water when its behaviour is that of an employer. The current model exploits drivers: They are effectively employees but do not benefit from the associated protections. We are issuing a call to workers to stand up for their rights and join the class action against Uber.”

In the UK where the Supreme Court recently ruled that Uber drivers be treated as employees of the company and not contractors, the rationale behind the court’s ruling is that the drivers were not independent contractors because their activities were “very tightly defined and controlled by Uber.”

The judge cited the company’s control over fares and how it dictates the contractual terms on which drivers perform their services.

As reported by several outlets, the UK case now goes back to the employment tribunal, which could order Uber to pay compensation to about 20 original claimants. Thousands more Uber drivers have taken legal action against the company, and the decision could be quickly applied to them.

Such a precedent could have ramifications and set the tone for what it is to come in South Africa where a local law firm has joined forces with the same legal team that handled the case for the drivers in the UK.

But it won’t be the first time. In 2016, seven drivers (both independent and partner-engaged) took Uber to court and won, but Uber won the appeal against the drivers who, by the time they had founded a group called the Independent Drivers Guild, had already been deactivated from the platform.

Obviously, the drivers involved in the latest class-action suit against Uber in South Africa would be hoping for better outcomes this time around.

Featured Image Courtesy: DepositPhotos

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