Supreme Court judges grill Uber on why it believes its drivers aren’t ‘employees’

Uber has highlighted the flexibility afforded to drivers as it challenges a Court of Appeal ruling that classified its drivers as employees. Photo / Arkadiusz Ziolek

Uber is fighting to overturn a 2022 Court of Appeal ruling that classified four drivers as employees.

The multinational ride-sharing company does not believe it needs to give drivers the rights afforded to employees, such as the minimum wage, leave entitlements and KiwiSaver contributions.

Indeed, treating its drivers like employees would fundamentally change its business model.

Presenting Uber’s case to a panel of five Supreme Court judges this morning, Paul Wicks, KC, highlighted the flexibility enjoyed by drivers, who can choose their hours, work for competitors, control their expenses and maximise incentives offered by Uber if they wish.

Wicks argued drivers are only loosely associated with Uber, which gives them a platform to connect to customers.

Testing Uber’s proposition, Supreme Court Justice Forrest Miller noted that unlike typical contractors, drivers cannot negotiate the terms of their contracts.

He recognised Uber’s “dominance” in its relationship with drivers, describing the “take it or leave it” nature of the contracts it offers drivers as “problematic”.

When Uber’s lawyer tried defending this, another judge, Sir Joe Williams, chimed in saying it is effectively a “take it, or take it later” offering.

The panel of judges also questioned how closely drivers are linked to their customers.

Miller made the point drivers are not paid directly by customers, with Uber collecting fares and taking a cut, before passing the rest on to drivers.

One of Uber’s lawyers, Nathaniel Walker, argued it would be cumbersome if drivers were paid directly and had to pay Uber a fee themselves.

Another judge, Dame Susan Glazebrook made the point that if a customer has a problem, they can complain to Uber, not their driver. Indeed, customers don’t even know drivers’ full names and vice versa.

Walker responded by coming back to the fact the arrangement is outlined in the agreements drivers can choose to enter into with Uber.

“It might be, but it’s just nuts, isn’t it?” Glazebrook said.

The Supreme Court will continue hearing Uber’s argument before First Union and E Tū, which represent the four drivers who initially took Uber to the Employment Court in 2021, respond.

The case has been set down for today and tomorrow. It will likely take some months before the verdict is delivered.

While the ruling will technically only apply to the four drivers who took the case, the unions say they are working with about 1000 other drivers who want to challenge Uber.

The decision could also affect the employment status of other workers in the gig economy.

This said, the Government is changing the law to codify what constitutes being an “employee” versus a “contractor”.

It is proposing to classify a worker as a contractor when there is a written agreement that specifies the worker is an independent contractor; the worker is not restricted from working for others; the worker is not required to be available to work certain times or days or for a minimum period; or is able to sub-contract the work; and the business does not terminate the arrangement for not accepting an additional task.

The Employment Relations Amendment Bill was introduced to Parliament in June and is due to have its first reading in coming weeks.

The outcome of the Uber case could affect the way parts of the new law are applied.

The Supreme Court will need to consider Uber’s case under the existing law.

Jenée Tibshraeny is the Herald’s Wellington business editor, based in the Parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.