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Uber and the Platform Economy – a new hybrid form of employment?

The biggest content-providing company in the world employs no content-creators; the biggest hospitality company in the world owns no properties or hotels, and the biggest taxi company in the world has no vehicles on its balance sheet.

Welcome to the 21st century aka the world of Facebook, Airbnb, Uber and the like;  platform companies which have harnessed the unrivalled powers of technology and the Internet to create a marketplace or ‘platform’ where everyone can become a casual journalist, a B&B host or taxi driver at the push of a button.

At face value ‘Platform Companies’,  as they are more commonly known, do away with the formality, hierarchy and structure of a normal company and recruit ‘partners’ or ‘taskers’ from the Internet.  By creating a marketplace for the goods and services in question, anyone with access to the Internet and a smartphone can become a service provider, arguably doing away with rigid regulation, licenses and employment contracts.

Studies show that most of the ‘partners’ providing services to companies such as Uber or Deliveroo, are young, urban, university graduates or students, seeking flexibility, independence and a quick job in between lectures or commitments – without the constraints of formal contracts and notice periods. Most of these Platform Companies recruit ‘partners’ for single individual jobs lasting a few minutes – an Uber taxi driver is not bound for months or days, but solely for the time required to take someone from point A to B.  Once the trip is completed, the ‘partner’ gets paid his fee, and the relationship between the parties ends there.

As always, the law is struggling to keep up with technology and its light-speed advances in every facet of our lives, and platform companies are constantly testing the limits of the law on regulation, licensing, health and safety, consumer protection and taxation.

An important question which has arisen in the past months is linked to the nature of the relationship between these companies and their ‘partners’ and whether such relationships constitute employment, self-employment or a hybrid type of employment which is, as yet, unregulated.

Both Maltese and European law make a distinction between employment and self-employment, with the former status granting job-protection, a guaranteed minimum wage, sick leave, vacation leave, maternity leave, minimum rest and break times, protection against discrimination and unfair dismissal, right of representation and a number of other rights and conditions of employment, which are not afforded to self-employed persons.

Maltese law also protects employees who are nominally engaged as ‘self-employed’ but are in practice equivalent to employees, and provides in the Employment Status National Standard Order, that if an employment relationship fulfils five of the eight criteria listed in the order (e.g. depending on one person for 75% of the income in one year or using tools provided by the employer), then such an ‘employment relationship’ shall be deemed to be an ‘employment’ at law.

When it comes to the Platform Economy and companies such as Uber and Deliveroo, the boundaries between employment and self-employment become even more blurred. On the one hand ‘partners’ or ‘taskers’ providing their human resource to such companies are free to decide on their working time, can refuse tasks or briefs, are not bound by exclusivity and are not reimbursed for the costs they incur in the provision of their service to the company.

On the other hand, the same companies usually have brand visibility and some sort of organisational structure,   quality control of sorts, control over prices charged by their ‘partners’ and also require the completion of the task before effecting payment for services rendered.

In countries such as the UK, Spain, France and the US, companies in the platform economy are facing a barrage of legal suits, in relation to their licensing, regulatory and employment law shortcomings.

In a recent UK Employment Appeals Tribunal (‘EAT’) judgment dated 10th November 2017 in the names Uber B.V –vs- Mr Y Aslam and others, the EAT confirmed that since Uber drivers are obliged to “accept at least 80%” of trip requests” then the drivers’ presence on the roads, with their app ‘switched on’, meant that such drivers were available to work and at the disposal of Uber.

Taking this into consideration, the EAT was satisfied that contrary to Uber’s argument that it was acting in a principal-agent relationship, the reality on the ground was a different one, and when drivers had switched on their apps to signal their ‘availability’ for trips, this fulfilled all three criteria which constitutes “working time” under the Working Time Regulations, being “working, at his employer’s disposal, carrying out his activity or duties”. For these reasons, it was confirmed that Uber ‘partners’ are indeed Uber ‘employees’ in the eyes of the law, and should therefore be afforded protection in terms of English and European law.

Although this new form of “platform-business” approach is still relatively novel in Malta, it is only a matter of time before platform companies and this type of engagement reaches our shores. While this type of employment could, arguably, be considered to be a very brief, fixed term contract of employment ending on the “completion of a specific task”, it will be interesting to note how such employment will be interpreted in light of existing Maltese legislation and how the Maltese Courts or Tribunals will determine these cases when a dispute reaches our Courts.