Uber, Deliveroo : Disrupted Traffic

Who doesn’t know Uber ? This company, which allows you to hire a driver in record time via an application – especially in the largest cities – and which has undermined the taxi profession by offering a low regulated service at high competitive rates ? The company’s economic success has been such that it has led to a phenomenon of “ubiquitous” work with the development of other platforms, such as Deliveroo or Uber Eats for meal delivery. Your Uber driver is in principle a self-employed worker, who simply takes advantage of the platform to do her/his business. But this regime could change after a Uber business partner has filed a legal claim for obtaining an employee status.

When asked about the case of Mr. Z, a driver working with Uber, the Paris Court of Appeal considered that the legal relationship in question was not commercial but an employee relationship – judgment of January 10, 2019 (n°18/08357).

Case Law Definition of the Employment Contract

The contractual employment relationship is not defined by law. Since 1996, case law defines it as “the commitment of a person to work for and under the direction of another person for remuneration, the relationship of legal subordination thus required being characterized by the power of the employer to give orders and directives, to control their execution and to sanction the breaches of its employee”.

Mr. Z, in employment relationship with the company Uber, brought an application before the judge for the relationship to be reclassified as an employment contract. The court applied to had to determine whether, in practice, the conditions for carrying out the activity in question met or not the decisive criteria for employment : the prerogatives of an employer to order, control and sanction the work of an employee.

To these three elements, the jurisdictions regularly add a fourth relating to the performance of an activity within an “organized service” under conditions determined unilaterally by a person distinct from the worker concerned.

Legal Presumption of Non-Salaried Employment For “Self-Employed” Workers

In the present case, evidence of the existence of an employment contract was complicated by the existence of a presumption to the contrary. Article L. 8221-6 (I) of the French Labour Code provides that workers registered in the Trade and Companies Register or in the Employment Repertoire, as Mr. Z was, like other Uber drivers, are presumed not to exercise their professional activities within the framework of an employment relationship. The same article (II) nevertheless adds: “The existence of an employment contract may, however, be established when the persons mentioned in I provide services directly or through an intermediary to a principal under conditions which place them in a relationship of permanent legal subordination to the latter”.

Worker’s Independence and Organized Dependency Situations

The appellate judges began by comparing Mr. Z’s registration in the Employment Repertoire with the framework imposed by the Uber platform for the organization of his activities : “far from freely deciding on the organization of his activity, seeking customers and choosing his suppliers, he thus integrated a transport service created and entirely organized by the Uber company”.

In particular, the Court pointed out two antinomies with Mr. Z’s status as a self-employed worker, one concerning the prohibition of constituting his own clientele, the other the impossibility to determine his own fare rates. The Uber “Community Charter” prohibits its partners from building a customers’ list from the passengers contacted via the company’s application, as well as from embarking “non-uber” customers during a “Uber” race. As for the tariffs for transport services, they are determined unilaterally by the Uber algorithms.

Finally, the exercise of driver services involves, within the Uber ecosystem, contracting with a list of partner suppliers for the rental of a vehicle in compliance with the requirements of the platform or the rental of a driver’s professional card. A service to facilitate the rent payments is directly operated by Uber and further captivates drivers who, as Mr. Z, need it to operate.

Demonstration of a Subordination Relationship

The concrete assessment of Mr. Z’s working conditions revealed that Uber’s prerogatives towards him were equivalent to those of an employer towards an employee.

With regard to the power to order, the Court of Appeal pointed to the GPS instructions of the Uber application, as well as the behavioral guidelines imposed by the “Partnership Conditions”, “in particular on the content of conversations to refrain from having with passengers or the non-acceptance of tips from them, which are incompatible with the independent exercise of a profession”.

Concerning the power to control the activity of the co-contracting drivers, the judges considered that it was effective since Uber kept a constant eye on the number of race refusals or on the geolocation of connected cars.

Regarding finally the power to sanction, Uber reserved the right to temporarily suspend or permanently deactivate the account of a driver if he/she had an abnormal rate of race cancellation, if it was the subject of reports for problematic driving or if he/she no longer met, for one reason or another, the platform’s requirements. According to Article 2.4 of the applicable contract, Uber had a “reasonable discretion” to limit or prohibit access to its application.

A Still Uncertain Resolution

After a detailed analysis of Mr. Z working conditions, the Parisian judges considered that a sufficient body of evidence allowed them to characterize the existence of a subordinate relationship and therefore of an employment contract between Mr. Z and Uber. Naturally, the legal interest of the discussion is considerable:

  • A partnership may be freely terminated subject to sufficient notice while an employee must be dismissed for a real and serious cause;

  • An entrepreneur pays her/his various professional charges while an employee only has her/his salary reduced by salary expenses.

It is therefore a Uber counter-revolution that we are witnessing today, likely to compromise the sustainability of this company in France – as the platform is already warning us. The final answer will be ordered by the Court of Cassation. We’re waiting for its delivery. It will have the last word, unless the legislator intervenes, if he/she dares to venture into this thorny subject with a measure that will necessarily dissatisfy part of the population. For the moment, the authorities’ silence is deafening.

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