The gig business model being used by both ride-hailing and delivery services has continued to meet stiff opposition from labor unions and governments, and courts have been pandering to their yearning.
The bone of contention has been the classification of drivers as independent contractors instead of employees, which denies them minimum wage and workers’ benefits. Across markets, ride-hailing companies, mainly Uber and Lyft, are increasingly losing the fight to save the gig economy.
On Monday, a Dutch court ruled that Uber drivers are employees rather than independent contractors and are entitled to greater workers’ rights and in some cases are entitled to back pay.
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The judgment follows a landmark ruling in London in February, classifying Uber drivers as employees and forcing the California-based taxi app operator to grant employment status to its drivers.
The Federation of Dutch Trade Unions had filed a complaint with the court arguing that drivers deserve the same benefits as other workers in the taxi sector. The Amsterdam District Court sided with union, upholding the labor law as it’s applicable to taxi transportation.
As it had responded in other places where the court had ruled in favor of drivers, Uber said it “has no plans to employ drivers in the Netherlands” and will appeal against the decision.
“We are disappointed with this decision because we know that the overwhelming majority of drivers wish to remain independent,” Maurits Schönfeld, Uber’s general manager for northern Europe said. “Drivers don’t want to give up their freedom to choose if, when and where to work.”
The ruling was based on the collective labor agreement for taxi transportation, which recognizes taxi drivers as employees, which the court found that Uber has flouted by giving them the self-employed status.
“The legal relationship between Uber and these drivers meets all the characteristics of an employment contract,” the ruling said.
The FNV hailed the ruling as “a huge victory for drivers” who it said will gain more pay and benefits.
“Due to the judge’s ruling, the Uber drivers are now automatically employed by Uber,” said Zakaria Boufangacha, FNV’s deputy chairman. “As a result, they will receive more wages and more rights in the event of dismissal or illness, for example.”
The judges also ordered Uber to pay a fine of 50,000 euros ($58,940) for failing to implement the terms of the labor agreement for taxi drivers.
Uber was forced by UK Supreme Court to accept drivers demand including the right to form a union, after it lost its bid to keep the classification of more than 70,000 drivers as independent contractors in February.
In March the ride-hailing giant, in an apparent effort to take the attention of the authorities off its business model, said it will improve workers’ rights, including the minimum wage in London, and allowed drivers to form a union for the first time. It also includes giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.
While the battle cuts across its markets, including Uber’s largest market California, where the government has enacted the AB5 law to force Uber to classify drivers as employees, Europe is swiftly kicking against the gig economy.
Last September, the Spanish Supreme Court ruled that delivery drivers are employees not independent contractors, prompting the Spanish government to enact a law backing the ruling up early this year.