The American driver service suffers a decisive defeat before the Zurich Social Insurance Court. Uber wants to move the judgment on.
The taxi service operated by the US company Uber is extremely popular – but also extremely controversial. Whether or not Uber drivers are self-employed has been a concern of the courts at home and abroad for years. A groundbreaking verdict has now been passed for Switzerland: The social security court of the canton of Zurich holds in a highly anticipated verdict: “The activity of the typical driver for which he has used the Uber app is to be qualified as dependent.”
The judgment, which was passed shortly before Christmas and which is available to the NZZ, has far-reaching consequences for Uber. Uber is now active in nine Swiss cities and is considered a pioneer of the so-called gig economy, i.e. that part of the job market in which jobs are awarded to freelancers at short notice via internet platforms.
For the taxi business, this means that Uber sees itself as a mere mediator between the passenger and the chauffeur. The latter decide for themselves if and when to drive for Uber. As a result, however, they are also not entitled to social security contributions or holiday compensation.
However, the Social Insurance Institution of the Canton of Zurich (SVA) saw it differently. In 2019 she came to the conclusion that Uber drivers – especially non-professional drivers in the Uber Pop category – were employees of an Uber subsidiary in the Netherlands. She therefore demanded from Uber social security contributions plus interest on arrears in the amount of around 5.2 million francs for 2014.
Drivers depend on Uber
Uber challenged the decision, which is why the Zurich Social Insurance Court had to rule on it. Because there are a lot of Uber drivers in Zurich, the cantons have transferred the dossier to the SVA Zurich in order to clarify the independence issue.
Although individual points speak in favor of self-employment, it says in the judgment. But overall, Uber drivers are clearly employed.
The court justifies the judgment with the existence of a “pronounced subordination relationship”. In other words: The drivers are heavily dependent on Uber and can only make a few decisions themselves. In addition, from the public’s point of view, the drivers did not act in their own name or on their own account. Basically, Uber collects a commission of 25 percent of the fare.
The cheap Uber Pop category is no longer offered in Switzerland, but that doesn’t matter to the judges. The ruling applies to “typical” Uber drivers, of whom there are around 3,200 in Switzerland. This applies to those who do not employ a salaried driver and who do not handle their journeys through their own company.
The Zurich judges could not clarify the question of whether Uber Switzerland or the Dutch Uber subsidiary is the employer of the driver. They also agreed that Uber was partially right on one point: the required CHF 5.2 million in social security contributions plus interest were not sufficiently covered. Here the SVA Zurich has to go over the books again.
Still, the ruling is a defeat for the US driver service. Until now, the question of what status Uber drivers have in Switzerland has not been clarified. The Federal Council rejected a “Lex Uber” in October. Now the Zurich judges have rejected the traditional Uber model.
Uber wants to appeal
Uber Schweiz is correspondingly disappointed: “This decision, which is based on facts from 2014, ignores the fact that the majority of drivers in Switzerland want to remain independent,” the company said. Since 2014, Uber has made numerous changes to strengthen the freedom of choice and autonomy of drivers.
“That is why we will appeal this decision,” said Uber. At the same time, they want to seek an exchange with all those involved in order to «fundamentally improve» the platform work in Switzerland.
The SVA Zurich did not want to comment on request.
Uber is playing with it on time. The company excludes employing its drivers. But she seems willing to make certain compromises and hopes to be able to legalize her model somehow with legal tricks. Pending further judgments, Uber is also likely to expand its dominance in Switzerland.
Uber has been in Switzerland since 2013 and has been driving in gray areas ever since. In addition to providing taxi services in many cities, the company also offers the Uber Eats grocery delivery service. This works on the same principle. The easy handling of the app and the generally lower prices compared to conventional taxis made Uber extremely popular in this country. Worldwide, Uber had sales of $ 11.1 billion in 2020, but the California-based company has never posted a profit.