A recent ruling by a New Zealand court has dramatically altered the employment status of Uber drivers, designating them as employees rather than independent contractors. This decision, which represents a significant shift in the legal landscape for gig workers, has elicited varied responses from those directly impacted and has broader implications for the gig economy.
The Employment Court’s groundbreaking decision, delivered in 2022, addressed the employment status of four Uber drivers. The court’s ruling granted these drivers several key workplace protections, including entitlement to paid leave, holiday pay, and the minimum wage. This ruling marked a major departure from the previous classification, where drivers were considered independent contractors without such benefits. The decision set a critical precedent, potentially influencing how similar workers will be treated under the law.
Uber, contesting this ruling, appealed to the Court of Appeal in June 2023. However, the Court of Appeal upheld the initial decision, reinforcing the drivers’ classification as employees and affirming their rights to the protections granted. This outcome has been met with mixed reactions from Uber drivers across New Zealand.
Asesh Narayan, a full-time Uber driver based in Auckland since 2021, welcomed the court’s decision. Narayan, who has faced growing difficulties in making a sustainable income due to a high number of drivers and reduced ride requests, believes the ruling will benefit drivers significantly. He observed that securing rides has become increasingly challenging, affecting drivers’ earnings and overall job satisfaction.
In New Plymouth, Murali Radhakrishnan, who has been driving for Uber for 18 months, echoed similar concerns about declining earnings. Radhakrishnan noted a significant drop in his daily income, which used to be around $250 on good days but has now decreased to between $50 and $100. He attributed this decline to a noticeable reduction in ride requests, despite the number of drivers in his area remaining relatively constant. This decrease in ride volume has had a substantial impact on his financial stability.
Jojo George, a former part-time Uber driver in Auckland who quit about a year ago, cited difficulties in securing enough rides as his reason for leaving. George used to earn between $1,000 and $2,000 on particularly good days, but those opportunities have dwindled. While he valued the flexibility of being a contractor, he found that recent changes in Uber’s pricing and surge rates made it increasingly hard to sustain his previous income levels. George noted that Uber’s adjustments, which now offer only modest increases during peak hours, have exacerbated the financial challenges for drivers.
Mathews Biju, a former full-time driver who used to work over 12 hours a day, has also reduced his driving hours. Biju observed that many of his former colleagues have stopped driving due to the impracticality of the job under current conditions.
In response to the court’s ruling, Uber Australia and New Zealand’s managing director, Emma Foley, announced plans to appeal the decision once more. Foley expressed concerns that the ruling creates uncertainty for workers who value the flexibility of contracted work and for businesses relying on contractor workforces. She stressed the need for legal clarity on contractor arrangements, arguing that flexibility and the ability to work for other companies are crucial aspects of modern employment. Foley highlighted that 90% of Uber drivers and delivery workers have indicated they would not continue with Uber if flexibility were reduced, underscoring the importance of maintaining such work options.
Workplace Relations and Safety Minister Brooke van Velden is working on potential legal changes that could limit workers’ ability to challenge their employment status in court. This proposed change has faced criticism from unions like FIRST Union and E tū Union, which have urged the minister to reconsider her plans. Meanwhile, the Labour Party has celebrated the Court of Appeal’s decision as a victory for fair treatment and legal protections for Uber drivers, while the Green Party has called for the government to respect the court’s ruling and avoid undermining employment protections. -TIN Bureau