Private Transportation Drivers – Employees or Independent Contractors?

Private Transportation Drivers – Employees or Independent Contractors?

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In the last decade, we have witnessed a significant transformation in the area of transportation services. Several new transportation service providers have entered the market, the offer has increased considerably, and accordingly, the price of the service has decreased. On every corner of the global metropolis, you can see a car of a different transportation company (Yandex, Uber, Cargo…) and customers are now able cheaper than ever move from point A to point B. Private transportation providers have higher profits than ever, and everyone seems to be pleased.

However, from the labour law perspective, the employment status of private transportation drivers still remains vague.

United Kingdom: Uber Drivers Entitled to Workers’ Rights

The UK supreme court has dismissed Uber’s appeal against a landmark employment tribunal ruling and backed the tribunals’ decision that Uber drivers should be classified as workers with access to the minimum wage and paid holidays.

Uber argued that their drivers are independent, self-employed “partners” that are not entitled to basic workers’ rights. The arguments in this respect were that they have full flexibility in their working hours, and they are their own employers.

The court concluded that the drivers were neither independent contractors nor employees, but that they have a status of workers as soon as they log on to the app until they log off. Consequently, they are entitled to more rights, which include the legally enforceable minimum hourly wage and paid holidays.

Serbia: the Unenviable Position of ‘Platform’ Workers in Serbia is Justified by Better Earnings and Flexible Hours?

In the area of private transportation and food delivery services, The Serbian capital has received several new players on the market in recent years. The COVID-19 pandemic and isolation measures have especially increased the use of food delivery applications, with an increase in the number of new users and higher demand among existing ones, leading to creation of new jobs.

In order to become a driver for such a company, every person needs to meet a few necessary conditions (e.g., that the person has not been prosecuted, 5 – year – driving experience). At the same time, the company defines their service as innovative and offers an application through which you can order “Assistance on the way” from point A to point B. This “Assistance on the way includes “renting a car with a driver”, who does not have to meet the criteria defined by the Law of Road Transport.

Drivers are mostly engaged on the basis of temporary or seasonal work agreements, i.e., jobs that do not last longer than 120 working days a year, or supplementary employment agreement. As a result of such agreements, drivers are not entitled to full-time employment, paid holidays, sick leave, adequately paid overtime work, etc. Moreover, as a consequence of the discrepancy between the Labor Law and the Employment and Insurance Law, drivers’ status can hardly be qualified as employment, nor can it be qualified as unemployment.

Conclusion: Can the UK Supreme Court’s Decision Have an Impact on Other Legislations Worldwide?

This decision will definitely lead to significant market consequences in the near future. The dilemma is whether this decision will have an influence on the similar issue that Serbia is facing. It is hard to estimate at what moment our domestic issue with the drivers’ status and rights will slowly begin to be resolved.

However, one thing is for sure, the decision by the UK Supreme Court will set a high-standards in the “gig economy” which will mostly be implemented worldwide. As a consequence, it may be expected that our government will start solving the problem in the nearest future, which will lead to similar results on the market as in the UK and at the same time start to treat equally all players on the market. 

This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.

By Kristina Pavlovic, Associate, and Petar Knezevic, Trainee, Samardzic, Oreski & Grbovic