Department for Transport to assess Uber employment conditions

The government is to create a working party under an independent chair within the Department for Transport to inquire into the pay and working conditions at Uber, in response to a request from Labour MP Frank Field, who is leading a campaign to investigate employment arrangements in the ‘gig economy’

The announcement was made during a Westminster Hall debate which Field secured on the regulation of working conditions in the private hire industry, within which Uber is a major operator. The MP is a former chair of the work and pensions committee and has previously published a report, Sweated Labour, which concluded that drivers working with Uber may be taking home as little as £2 an hour, less than a third of the National Living Wage.

During the debate, Field claimed Uber offered its drivers ‘a bogus self-employed contract’, which also imposed a large number of risks and charges on the drivers.

Field said: ‘The way in which these companies are constructed means that they are fiddling: they do not pay their dues in VAT, national insurance or income tax, which means the rest of us have to pay for them. They are now registering returns on their very limited capital that are out of this world and should be tamed.’

In his response John Hayes, transport minister, pledged during the debate that with the working group in place there would be, ‘no veil, no mask, and nowhere to hide for people who do not do the right thing’.

‘Greater flexibility in working arrangements can increase employment opportunities for those who have other commitments or aspirations, but we must equally be aware of the negatives. Nor must we regard the traditional private hire vehicle driver and operator relationship through rose-tinted spectacles and perceive it as some sort of ideal where operators work solely in the interests of drivers,’ he said.

Hayes announced the setting up of a working party, with an independent chairman, to look at Field’s specific points. He said: ‘I will consider in due course the terms and conditions of that working party, its membership and how it might have an effect on future policy.’

Field’s other request was for more support for transport executives to clarify the powers that they have to give licences to companies such as Uber.

In reply Hayes said: ‘I will look at the guidance issued to local authorities. They may be unaware of the extent of their powers and certainly of their ability to use them. He is right to say that there are problems with different local authorities interpreting those powers in different ways, and it seems to me very important that we give clarity about that through the advice we offer to local government.’

This review is set to include an examination of the conditions local authorities can demand from operators before licences are granted, to make clear the extent to which adequate working conditions for drivers can be considered.

Field said: ‘This is a big, big breakthrough. The government has acted on the evidence I submitted on the poverty pay and shoddy treatment meted out to some workers at the bottom of the ‘gig economy’, both by commissioning the Taylor review and now by inquiring specifically around the private hire industry. Watch this space.’

The Taylor review on modern employment practices, led by Matthew Taylor, chief executive of the Royal Society of Arts, is expected to deliver its report later this month.  The review is looking at the impact of disruptive technologies on working practice, and at workers’ rights and employment status in the gig economy.

Publication of the review is expected next week, and the BBC has reported that the food delivery firm Deliveroo, which also operates in the gig economy, has sent in a submission calling for changes in the tax and employment laws to enable it to pay sickness and injury benefits to its 15,000 riders in the UK.

Deliveroo said it classifies its riders as self-employed, to reflect their desire to work flexibly, but says this means it cannot offered enhanced employment rights. The company claims the current laws constrain its ability to improve workers’ conditions, as under self employment status, they are not entitled to sickness pay, holiday pay or maternity and paternity leave and are not covered by the minimum wage rules. It wants the government to consider options for a new category of ‘on demand’ worker.

Hansard report on the private hire industry debate is here.

Details of the Taylor Review are here.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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