Uber has suffered another setback to its operational model in Europe after a Swiss insurance agency ruled that Uber drivers are employees, not freelance contractors as the company claims — meaning it must pay social security contributions.
This follows a similar ruling by a UK employment tribunal in October which found that the two Uber drivers bringing the claim were employed as workers by Uber, rather than being freelance contractors.
Swiss broadcaster SRF says the Suva agency made its decision on the status of Uber drivers in the market on account of their inability to set price or payment type, and because they are threatened with consequences from Uber if they do not fulfill its requirements.
The Suva described its decision on the classification as a “clear conclusion”. The public sector insurer is involved in determining whether workers are freelance or not as a provider of compulsory on-the-job accident insurance which is required for certain high risk professions.
At the time of writing Uber had not responded to a request for comment but the company’s general manager in the market, Rasoul Jalali, told SRF it intends to appeal. “In Switzerland, courts still have to decide the ultimate verdict,” he said.
Update: In a statement provided to TechCrunch an Uber spokesperson added: “Suva has been initially classifying independent workers as employees on a case-by-case basis before Uber’s arrival in Switzerland. Taxi-dispatchers have had exactly this issue for years and yet today there is not one driver employed by a big dispatcher in cities such as Zurich or Geneva. So this is nothing new in Switzerland and we will challenge it, just as others have. Drivers using the Uber app are independent contractors who enjoy all the flexibility and freedom that come with being self-employed.”
Uber’s spokesperson also said the Suva ruling only applies to one Uber driver — albeit the ruling could set a precedent for other drivers to challenge the company’s classification of them.
Uber’s appeal in Switzerland might be superseded by the country’s Federal Council which, according to the SRF, is due to submit a report on digital services soon that’s set to make it clear whether new rules will be created for technology service providers.
Uber is also appealing the UK tribunal ruling — despite the latter dubbing its characterization of the relationship between it and its drivers as “a pure fiction”. That ruling sets a precedent for other Uber drivers in the UK to bring employment classification challenges against the ride-hailing platform giant.
As well as various challenges at the national level, Uber is also defending its business model in front of Europe’s top court, the ECJ, which is also set to rule this year on whether the tech giant is a transportation service or a digital platform. The case was referred to the court after a legal challenge in Spain.
Any ruling by the ECJ which deems Uber a transportation provider would have huge ramifications for its business across the region as it would be required to comply with national regulations of the 28 EU Member States.