Employment law and digital platforms

09 March 2020
Jacques Perotto and Quentin Kéraval

Even if no specific regulations exist for the digital platforms, the issues raised by the new ways of working in the “gig economy” can explain a couple of recent decisions delivered by the French Supreme Court.

Indeed, the Cour of cassation’s decision of March 4th 2020 confirmed that when the driver connect to the UBER digital platform, a relationship of subordination between him and the Company was established.

Consequently, the lack of independence and the existence of a relationship of subordination could indicate the fictive nature of the independent worker status.

The criteria taken into account by the judge were as expected:

– The driver worked for an organized transport service under terms defined unilaterally by UBER as a result, the driver was unable to:

· Organize his own professional activity,

· Set his own fares, which were set by UBER’s algorithm,

· Choose his own route without receiving a price correction form UBER,

· Choose freely a ride proposed by UBER, the final destination not necessarily being known by him in advance,

· Build up his own customers,

· Choose his own suppliers.

– The exercise of, indirect or disguised, disciplinary power through:

(i) UBER is temporarily disconnecting drivers after three ride refusals;

(ii) the application of fare adjustments if the driver chooses an “inefficient route” different to UBER’s recommended route;

(iii) the deletion of the driver’s account in the event of non-compliance with the cancellation rate set unilaterally by UBER or “problematic behaviour” reported by users.

From UBER’s side, the driver “remains entirely free to connect to the application or not, to choose the location and the time he/she intends to connect, without informing the platform in advance, and to put an end to the connection at any moment”; this argument has been rejected by the judge.

Impacts of the decision

In spite of this decision, the digital platform business model, from the sharing economy, should not be really challenged for the moment, although further thinking is probably required about its practical implementation.

Indeed, the call into question of the business model will mainly depend on the number of disputes before the courts, which are few to date.

But UBER should not avoid the financial consequences of this decision; reclassification of the employment contract could effectively lead to the payment of social contributions.

Jacques Perotto, partner, and Quentin Kéraval, associate, in Alerion’s Employment department