Top law firms gun for Uber in SA driver exploitation lawsuit

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 23 Feb 2021

Ride-hailing firm Uber, which has had several run-ins with its driver partners in SA, is facing a lawsuit in the country.

Today, Mbuyisa Moleele Attorneys (Johannesburg), assisted by Leigh Day (London), announced they are preparing a class-action lawsuit to be filed in the Johannesburg Labour Court against Uber BV and Uber SA on behalf of South African Uber drivers.

The claim will be based on the drivers’ entitlement to rights as employees under South African legislation and will seek compensation for unpaid overtime and holiday pay.

Mbuyisa Moleele Attorneys and Leigh Day achieved the first two settlements in the silicosis litigation on behalf of gold miners in SA.

In a statement, the law firms say the claim follows a decision by the UK Supreme Court on 19 February that Uber drivers should be legally classified as workers rather than independent contractors, and as such are entitled to similar benefits.

In October last year, Uber drivers staged a national strike, calling on the South African government to regulate the e-hailing industry. In that industrial action, the drivers wanted to highlight exploitation as well as low wages in the industry.

Last month, disgruntled Uber Eats delivery partner drivers also held a nationwide shutdown of courier services, in protest against significantly reduced delivery fees and what they called “slavery” treatment.

Leigh Day represented the UK Uber drivers in the case in which the lower courts, including the English Court of Appeal, also ruled in favour of the drivers.

Subordination and dependency

According to the statement, South African legislation relating to employment status and rights – the Labour Relations Act and the Basic Conditions of Employment Act – is very similar to UK employment law.

Furthermore, it notes, Uber operates a similar system in SA, with drivers using an app, which the UK Supreme Court concluded resulted in drivers’ work being “tightly defined and controlled” by Uber.

In the UK case, it adds, the key issue was whether drivers contract with passengers using Uber as an agent, or alternatively that drivers are working for Uber.

The conclusion of the Supreme Court was that they work for Uber. Leigh Day notes that even though Uber’s lawyers had drafted agreements giving the impression that Uber was merely an agent, the court ruled that the true position was that under employment legislation, Uber has control over the way in which drivers deliver their services.

Through the app, it says, Uber sets the amount of the fare, the level of information given to the driver about the passenger and their destination, and through the ratings system, the monitoring of drivers’ performance, including the “deactivation” of drivers who do not conform to Uber’s standards.

The UK Supreme Court found that the contractual terms on which drivers perform their services are dictated by Uber.

The court noted that while the system of control operated by Uber was in its commercial interests, it clearly placed drivers in a position of subordination and dependency in relation to the company, the law firms say.

Below minimum wage

Uber SA operates in Johannesburg, Cape Town, Durban, Pretoria, Port Elizabeth and East London, and in 2018, it was estimated to control 75% of the South African taxi market, the law firms claim.

As the largest ride-hailing service in the world, they say Uber has a market capitalisation of around $108 billion, and its “Mobility” (Uber X) business reported operating income of $293 million in 2020.

The company has also lost or settled similar labour law cases in France, Switzerland, Ontario and North Carolina, they say.

According to the law firms, due to SA’s income disparity, few professional drivers actually own the cars that they drive. They instead rent them from owners, known as “partners” and split the earnings.

Leigh Day points out that key to Uber’s defence in the UK case was that it is merely a technology company acting as a booking agent for drivers, and not an employer.

However, it explains that in its own submissions to the 2020 SA Competition Commission Inquiry into metered taxis and e-hailing services, Uber stated that unlike other countries such as the US, Uber drivers in SA tend to be predominantly full-time on the Uber platform and their work for Uber is equivalent to fulltime employment, and not just a way of earning supplementary income.

This, along with the fact that the Competition Commission found that after deductions, some drivers earn less than the minimum wage, means that Uber drivers in SA work incredibly long hours just to make ends meet, the law firms note.

The Supreme Court recognised similar difficulties faced by drivers in the UK case by stating that in practice, the only way in which drivers could increase their earnings was by working longer hours, while constantly meeting Uber’s measures of performance, they add.

According to the law firms, estimates suggest there are between 12 000 to 20 000 drivers in SA using the Uber app who will be covered by the lawsuit, which is an opt-out class-action in which a small number of representative plaintiffs are claiming on behalf of the wider class of Uber drivers.

“Uber’s argument that it is just an app does not hold water when its behaviour is that of an employer,” says Zanele Mbuyisa of Mbuyisa Moleele Attorneys.

“The current model exploits drivers; they are effectively employees but do not benefit from the associated protections. We are issuing a call to workers to stand up for their rights and join the class-action against Uber.”

Richard Meeran of Leigh Day says: “The ruling by the UK Supreme Court is a final vindication for UK Uber drivers who have for too long been denied their statutory employment rights as workers. We hope that this class-action in South Africa will enable South African Uber drivers to access those same rights.”