103 - How the Supreme Court ruling against Uber will impact short-term rentals in the UK

On 19 February, the UK’s Supreme Court upheld a ruling that Uber drivers were workers for the company. This certainly has major implications for companies in the gig economy. I’m not a lawyer, but reading the judgement it could have implications for property management and hospitality companies, too.

Uber is often bracketed along with Airbnb – supposedly the world’s largest transport firm that owns no cars, and the world’s largest accommodation company that owns no property. But in reality they’re very different companies. Airbnb is a non-exclusive platform that deals with an asset – a room or home. Uber isn’t a platform for cars, it’s a platform for getting someone to drive you somewhere. That is work.

The short-term rental sector generally doesn’t have the same issues with insecure employment as other gig economy sectors like ride-hailing and food delivery, but there is a whole service infrastructure where many cleaners, maintenance people and check-in staff are working as independent contractors.

Reading the Supreme Court judgement, there are signs these could be impacted by the ruling.

What made the court decide the drivers were workers?

Some of the defining features in the judgement were how Uber controls, decides and restricts the actions of its drivers. This level of control is what makes the relationship essentially one of employment. It doesn’t matter if your contract defines someone as a contractor. UK law works according to the duck test: if it looks like a duck and sounds like a duck, it’s a duck. If a contractor looks like a worker and sounds like a worker, they’re a worker.

If you have someone who primarily works for you, or is in some ways retained by you, and there’s a general expectation that they need to complete work for you, then they are probably a worker.

Here are some key questions to ask of your supply chain:

• Do you set the price for particular tasks, with little or no freedom for your contractor to negotiate? Uber’s fixed pricing system was the number one reason it was seen as an employer.
• Do you have standard T&Cs that your contractors have to sign for a particular role? This again is seen as something an employer does, rather than a truly independent contractor who may have their own contract amendments or may even ask you to sign their terms.
• Do you exercise control over how people can take jobs? If some contractors get access to more jobs if they perform well and regularly take up work, or lose jobs if they don’t, that counts as control.
• Do you exercise control over how they do the jobs? If you strictly define how to clean, how to greet, what standards to hit and you enforce these by feedback or penalties, these are all signs of control.
• Do you restrict communication between the contractor and the end client? This might seem natural, but if the cleaning fee is officially something that covers a homeowner cleaning the home yet your company oversees the work and the cleaner can’t talk to the owner, that’s a restriction.
• Finally, is there a general expectation they’ll do work for you, even if there’s some allowance for them to say no?
• If the answer to some or all of the above is “yes”, then it’s possible your contractor could count as a worker. The Court does take into consideration the broader context – if you very carefully train check-in staff but they only do a couple of jobs a month, it’s unlikely they’re a worker. Context matters.

What should property managers do? 

This might not impact property management companies directly. If you subcontract cleaning or other parts of your operational delivery to another company, you aren’t directly responsible for the status of their working relationships. However, if their cleaners rely on that company for much of their work, and that company answers “yes” to most of the questions above, it’s likely that they’re a worker for that company. The worker relationship has to sit somewhere in the supply chain, even if it doesn’t sit with you.

The short-term rental sector has a bright future post-Covid. It’s seen as the safest way to stay, and it’s likely to bounce back faster than hotels. The Supreme Court judgement doesn’t shake the foundations of the industry like it does in ride-hailing, but the implications could be deep and long-lasting.

It’s on all professional property management companies to make sure they’re on top of that, and doing the right thing by their contractors – and their workers.