FILE PHOTO: A screen displays the company logo for Uber Technologies Inc on the day of its IPO at the New York Stock Exchange (NYSE) in New York, U.S., May 10, 2019. REUTERS/Brendan McDermid/File Photo
PARIS (Reuters) – France’s top court has recognized the right of an Uber (UBER.N) driver to be considered an employee, in a ruling that could upend the U.S. firm’s business model and potentially require it to pay more taxes as well as benefits such as paid holidays.
The decision by the Cour de Cassation could also have ramifications for France’s wider “gig economy”, as other taxi and food delivery apps from Deliveroo and JustEat to UberEats rely heavily on self-employed riders to conduct their business without having to meet a range of employee costs and benefits.
The Cour de Cassation upheld a previous decision by a court of appeal, saying the Uber driver could not qualify as a self-employed contractor because he could not build his own clientele or set his own prices, making him a subordinate of the company.
“When connecting to the Uber digital platform, a relationship of subordination is established between the driver and the company,” the court said in a statement.
“Hence, the driver does not provide services as a self-employed person, but as an employee.”
The decision could potentially pave the way for other drivers to ask for a reclassification of their work relationship with Uber, which, under the current framework, does not pay a wide range of taxes that fund France’s welfare system.
The decision also follows a series of legal challenges to Uber and similar companies from Brazil to Colombia and the United States itself. California, where Uber is based, recently passed a law aimed making it harder for apps to classify their workers as independent contractors rather than employees..
“This decision does not reflect the reasons why drivers choose to use the Uber app,” Uber said in an written statement.
“Drivers value Uber because of the independence and freedom to use our app if, when and where they want,” it added, noting the court’s decision would not lead to an automatic reclassification of all drivers using its application.
Reporting by Dominique Vidalon; Editing by Jan Harvey and Mark Potter