Uber Technologies Inc. lost a bid to challenge part of a landmark decision on the working rights of its drivers, meaning the ride-hailing app and its London rivals will have to overhaul their business models.
U.K. judges ruled that the tech firm should enter into a direct contract with passengers when providing car journeys and therefore assume more responsibility for each trip booked on their app.
Uber and others “will need to amend the basis on which they provide their services,” after the court concluded that “in order to operate lawfully, an operator must undertake a contractual obligation to passengers,” the judges said Monday. They also said London’s transport regulator will need to reconsider its current guidance to reflect the ruling.
The ruling shows that the battle over worker rights in the U.K. gig economy didn’t end after the nation’s top court ruled earlier this year that Uber must treat its drivers as “workers,” giving them access to vacation pay, rest breaks and minimum wage while they’re using the app.
The labor group that led the Supreme Court case, which forced Uber to reclassify its drivers as workers, said Monday’s decision will help prevent Uber and others from dumping risk on its drivers. The ruling will also give better protections for riders.
“If the obligation must be undertaken by the operator, the operator will have a powerful incentive to ensure that the drivers it uses are reliable and, if something does go wrong, a remedy against the operator...
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