Cheap fares remain Uber’s trump card in the court of public opinion

Friday, 11 July 2025

ANALYSIS: The Supreme Court can be a tough gig for a barrister.

Usually, when a case goes to court, there is a to-and-fro of opening and closing arguments, witnesses may be called and there are frequent adjournments.

A judge and perhaps a jury will be trying to keep up with the evidence.

But by the time an appeal goes to the Supreme Court, there is little of that, as all the facts should be on the table and all that is left is to rake over complex legal arguments.

Paul Wicks KC certainly had a gruelling day-and-a-bit on Tuesday and Wednesday making his case to a seemingly sceptical panel of five top judges that lower courts had got it wrong in their landmark judgments that a group of Uber drivers were actually employees.

It is certainly possible to sympathise with Uber’s point of view.

Uber appears to see itself as a technology company and disruptor providing a platform for passengers and drivers, and clearly has no appetite to get into the nitty-gritty of hiring and managing staff.

It comes across as genuinely indignant that its business model should be called into question.

But the current legal test of whether someone is an employee is a broad one that doesn’t only revolve around the company’s and worker’s intentions and how they might like the world to work.

Instead, the degree of control workers have over when and how they do their job, how important those workers are to the business, and whether they could truly be said to be in business on their own account, can be equally or even more important.

It is risky to read much into judges’ remarks during a hearing.

One of their jobs can be to test the arguments being presented to them, by attempting to pick them apart if necessary.

But it was hard not to observe that a couple of points Wicks made on behalf of Uber did appear to get very thoroughly ‘tested’ indeed.

One was that it was important drivers could log off its app and stop working whenever they wanted and that Uber didn’t then exercise any control over them during that time, even if they chose to work for a competitor.

The come-back seemed to be that employers don’t usually have the right to exercise much control over employees when they’re not clocked-on.

Another argument that overtly got the “so what?” treatment from the bench this week was that Uber needs to exercise some control over drivers when they are logged-on because that is what is necessary for Uber’s service to work.

A comment from Justice Susan Glazebrook, one of the five judges hearing the case, that they — or at least she personally — didn’t buy the argument that Uber only provided “a platform” wouldn’t appear on the face of it to be very auspicious for Uber’s chances at appeal.

Yet there are probably a lot of Kiwis who are secretly rooting for Uber, despite any concerns they might have about the conditions faced by its drivers.

Let’s face it, Uber is a cheaper alternative to traditional taxis and many of its customers won’t want to see anything that disrupts its business model and causes it to raise its fares.

The gig economy is pretty sweet for those not actually having to work within it, after all.

That means the Government will probably be expecting a pretty smooth ride for legalisation it has drafted clarifying how the distinction between employees and contractors will be determined in future.

The proposed amendment to the Employment Relations Act — which has passed its first reading and is currently awaiting scrutiny from a select committee — looks at first glance almost as though it could have been written by Uber.

Indeed, Council of Trade Unions president Richard Wagstaff has suggested that it was.

The Government had followed “word for word” what Uber wanted to see in the legislation, he told RNZ in October.

The amendment would confirm someone as a “contractor” if that is what they had agreed in writing and the business didn’t prevent them working elsewhere, didn’t require them to be available at specific times or for a minimum number of hours, and didn’t terminate their contract if they turned down a “gig”.

Those look like easy ‘ticks’ for Uber.

But there is at least one catch, as a lawyer representing the Workers First and E tū unions, Peter Cranney, observed in the Supreme Court on Wednesday.

It does also require contractors are allowed to subcontract their work to a third party, which Uber’s contracts don’t currently allow.

A cynic might suspect that clause was just included to give the select committee something to do by striking it out. Time will tell.

Assuming the amendment does find its way onto the statute books in a form that is helpful to Uber, it could encourage more businesses to dump employees and embrace the gig economy model.

That could lead to an ongoing erosion of entitlements such as holiday pay, sick pay, and the right to the minimum wage and to lodge personal grievance claims, for new groups of workers.

It could also risk putting pressure on the tax base.

The First Union has argued that if Uber is regarded as essentially a taxi firm employing Kiwi drivers — not a tech firm that charges drivers around the world a fee to its global platform — that could call into question the arrangements under which it books most of its profits overseas.

Chief Justice Helen Winkelmann remarked during the Supreme Court case that Uber’s current structure undoubtedly had tax advantages.

All the signs point to the Government reckoning it can afford to kick those cans of worms down the road though.

Cheap fares and perhaps the possibility of more ‘innovation’ in other industries, or a little more job security for many and a more resilient tax base to pay for public services?

Whatever the Supreme Court’s ruling, it seems pretty clear which way the winds are blowing across the road in Parliament.

CORRECTION*: Copy has been corrected to reflect Chief Justice Helen Winkelmann’s correct title. Also the spelling of Peter Cranney’s surname has been updated. (Amended Friday July 11, 2025 1.33pm)