What’s going on?

• Uber lost a major UK Supreme Court ruling (which has last for 5 years), forcing it to treat the 25 riders, who brought the case, as employees.

What does that mean?

• Uber famously treats its drivers as freelancers, but this court ruling means it’ll have to treat, at least 25 of them, as employees.
• As Uber already prescribes its drivers’ contract terms, remuneration, and ability to work, the court figured it was only right they were given a regular salary, not to mention vacation time and sick pay. Uber will now face the court to decide how much it’ll have to pay those drivers.
• Given there are around 1,000 others with identical complaints, it’s likely that similar settlements will open, just not for now.

Why should I care?

For markets: The end of the pandemic might not ensure a bright future

• Uber’s food delivery platform has benefited from the pandemic, but its ride-hailing business has suffered.
• Investors might’ve hoped its earnings would rise when economies reopened and cautious customers choose private Ubers over public transport. But between these new costs in the UK (Europe’s largest ride-hailing market) – and emerging problems in California, profit could be a long way away – which might be why Uber’s stock dropped.

The bigger picture: Japan’s stocks on the rise

• This Uber case could also affect other businesses reliant on gig economy workers.
  • Deliveroo (the global food delivery service in the UK) might face extra costs that could obstruct, while it’s reportedly planning an IPO before the end of March.

Content source: Finimize (2021) Raters Gonna Rate. Available at: https://www.finimize.com/wp/news/raters-gonna-rate/ [Accessed on February 21, 2021]