Is Uber a digital marketplace, where drivers and passengers are seamlessly brought together to undertake efficient private transactions? Or is it really an employer hiding in the grey folds of the law to avoid providing minimum wages, annual and sick leave, and to block collective bargaining among drivers?
Is it just a smart tech company that “matches and facilitates” the buying and selling of transport services, just as TradeMe does in the second hand market and AirBnB for holiday houses? Or is it gaming and manipulating vulnerable communities who are desperate for an income?
Is it a neutral platform to which drivers can log on and earn money whenever they like, without rosters and fixed hours and irascible bosses? Or is this flexibility and independence a cover for economic servitude, in which power is exerted by Uber through opaque algorithms, unilateral contracts, ratings, micro-rewards and penalties?
As a major hearing in the Employment Court continues into its second week, these are the questions being teased out before Chief Judge Christina Inglis, who has been asked by New Zealand’s two largest private sector unions to declare that Uber drivers are not – as the rideshare giant insists – independent contractors, but are instead employees entitled the range of statutory protections.
Uber maintains that no-one is forcing drivers to do anything; they fire up the app whenever they choose, are free to use competing rideshare apps like Ola and Zoomy, and can even operate in the traditional taxi market. They can fit their Uber driving around another job or business, study, parenting or hobbies; it’s entirely up to them.
But this notion of choice – cited repeatedly by Uber lawyer Gillian Service in her cross-examination of four driver witnesses in the case – has provoked emotional responses at times.
“I have a family to support,” Nureddin Abdurahman told Service in reply to her proposition that it was his choice to sign the Uber services agreement and use the platform. “They decide and I just agree,” he said. He had “no power” to change anything in the agreement.
“Let me put it this way – in New Zealand there are people who work 70, 80 hours a week. Why? Do you know in the refugee community, the way we live the father leaves in the morning to drive a taxi, and comes back in the evening and then the mum goes to cleaning in the evening. That is not a choice. It’s not a choice to work 90 hours a week.”
Abdurahman, who came from Ethiopia in 2008 and chairs the African Communities Council of Wellington, told the court that in addition to driving for Uber, he has helped many migrants and refugees who drive for the company. “My communities, we run away from exploitative systems. I know one when I see it. The way Uber works – that’s exactly what it is.
“It’s modern type slavery. In olden days, people used guards to make you submit. Now they play with your emotions. They know when you are desperate, that’s when you run to them. That’s the time they cut you.”
He had been driving a taxi, but the business he was with shut down during the first Covid lockdown. He turned to Uber out of need, not choice, he said. As one of nine siblings, he had a duty to send money home. “For me, when I go and work, it’s not how much I am getting paid an hour sometimes. I need to send $100 or $200 to my family this week – I don’t care what it’s going to take. I will just do something, I have to get that $200, even though it’s exploitative.”
Opening Uber’s defence argument yesterday, Service emphasised Abdurahman’s political leanings – he is a Labour-endorsed candidate in the local body elections – and told the court that the plaintiff unions, E tū and First, had framed the case against Uber to suit an “agenda”.
“The plaintiffs fundamentally disagree with the defendants’ [Uber BV and its New Zealand and international subsidiaries Rasier and Portier] digital transaction platform business models and the technology and digital services the defendants have provided. The plaintiffs view the absence of employment in ridesharing and meal delivery platforms as a bad thing.”
She said Uber’s transport and meal-delivery platforms “are flexible; the platforms are accessible; and the platforms make it easier for users to drive or deliver meals whenever and wherever they want with limited commitments. This creates an environment where there are low barriers to entry for opportunities for drivers, delivery-partners, and restaurant-partners to earn income.”
The question of whether drivers were employees or contractors under the Employment Relations Act required a fact-based inquiry, said Service. The law had been settled since 2005 when the Supreme Court ruled in the case of model maker James Bryson, who was found to be an employee of film company Three Foot Six (a case that five years later stoked an ugly dispute between actors and Sir Peter Jackson over the making of The Hobbit, and a law change under urgency to carve film workers out of employment law).
A succession of international court cases have gone against Uber’s argument that it is merely a technology platform, not an employer of drivers. But Service said these were not persuasive in the New Zealand context. While some of the facts in the cases heard by the European Court of Justice, France’s Cour de Cassation, the UK Supreme Court and the Dutch District Court of Amsterdam may be familiar, the current case was about “four individuals and the gig economy in Wellington”, and it had to be decided on the evidence and under New Zealand law.
The four drivers represented in the case – including Abdurahman – had entered into “commercial transactional relationships” with Uber and its subsidiaries, and arrangements had “operated as intended”, she said.
The elements of the Uber platform that the litigants had portrayed as controlling drivers – such as minimum user standards, promotions and incentives – were simply “part and parcel of maintaining a healthy marketplace for all platform users”.
As part of the assessment of whether the various inducements, payments, penalties and rewards are methods of control (an important element for the court in weighing up whether the drivers are employees), or merely part of operating an efficient market, the court has heard a wealth of detail about the day-to-day interactions between drivers and the company.
For instance, if a passenger soils a driver’s car, the driver can seek a cleaning fee from Uber, but the court heard this process is one-sided and frustrating. Mea’ole Keil, for instance, found that when a passenger vomited on his back seat, Uber was prepared to pay a $150 cleaning fee; but when another person trod on dog faeces and brought that into the car, Uber would only stump up $20, even though he had to log off the app and clean up the mess in his car during a peak time.
“Uber gets to decide whether we receive the fee or not, and at what amount,” said Keil.
Drivers also described hassles with Uber over getting paid $10 cancellation fees – which can apply when a passenger cancels or doesn’t show up – from which Uber deducts its 28 percent service fee. The company doesn’t have a physical base in New Zealand, and all interactions over issues like cleaning and cancellation fees are with a call centre in the Philippines.
Similarly, when drivers are suspended from the app for some reason – for instance, Keil was unilaterally blocked last year while Uber looked into a complaint from an anti-vax passenger who complained about his pro-vax comments – any challenge has to be taken up with the Philippines.
Every record of such interactions generates a so-called Bliss Ticket (named for Uber’s “support content platform”, Bliss Content), and are added to the large body of data held about individual drivers.
Another area in which drivers say Uber holds total control is its operation of “surge” pricing, when prices can treble and drivers can ramp up their earnings. Emma Foley, director of driver and marketplace for Australia and New Zealand, told the court that “dynamic pricing” (the official name for surge pricing) was a feature to “manage supply and demand for trips”. It was a “another service that drivers access when they choose to use the New Zealand rides platform”.
But Keil said surge pricing and the strategy behind it “are all determined by Uber…Drivers do not get advance notice about when and where ‘surge’ takes place. We just hope that we catch a good wave when the surge commences.”
Drivers can earn “status” by driving often and achieving high ratings from passengers. At the bottom is blue status, then gold, platinum, and diamond at the top. To retain high status, they need to maintain a minimum rate of acceptance of rides and a high customer rating. High status drivers also get discounts for petrol, oil changes and tyre replacements.
Top status drivers also get more information – in particular, when a trip comes up on a diamond driver’s app, they can see the length and direction of the trip, and therefore whether it’s worthwhile to accept it. Lowly drivers don’t get this information.
Abdurahman had diamond status, but lost it because he wasn’t doing enough rides.
“When I was on diamond status and maintained an acceptance rate of 85 percent or more, Uber through its app provided me with the duration and direction of the trip on a trip request. This information helped me drive economically and sensibly. Now I am a driver in blue tier – the lowest tier in the rewards system – my access to the additional trip information has been removed by Uber. All I can see is a request coming through with barely any information about the trip. I have no idea how far away the trip will be or how long the trip will be after pickup. I have no idea of the profitability of the trip. If I accept the trip, I could be driving 30 minutes to pick up a customer for a three-minute job.”
But Uber argues none of these elements of the system point to control or to the existence of an employment relationship.
“[N]one of the individuals were employed by any of the defendants at any point in time,” Service told the court. “Instead, the real nature of the relationships in this case are, and were, those recorded in the services agreements. This is consistent with the fact the defendants provide and support digital platform marketplaces by matching, facilitating, and incentivising users on those platforms.”
At the same time as the court in New Zealand continues to hear the case, however, Uber’s Australasian executive has acknowledged the need for greater protections for drivers. General manager of rides for Australia and New Zealand, Dom Taylor, told the Sydney Morning Herald last week the company supported standard, minimum rates of pay across Australia’s gig economy.
“We support an earnings safety net for gig workers that reflects the nature of independent work and preserves the flexibility that gig workers value,” Taylor said, emphasising it was “critical that this is an industry-wide reform”. However he did not believe Uber’s workers were employees.
The New Zealand case is also taking place against a background of rising pressure to update and clarify the law distinguishing those who are genuinely running an independent business from those who are labelled as contractors but are under the control of, and integrated into, the company they work for. A tripartite working group has delivered recommendations to workplace relations minister Michael Wood, who is expected to produce proposals for public consultation later this year.