Ruling may put the brakes on Uber

Uber allows riders to order and pay for its services through smartphones Keystone

The Swiss National Accident Insurance Fund (Suva) has ruled that a driver from the ride-sharing service Uber is an employee, rather than self-employed, going against Uber’s business model. This could threaten the future of service in Switzerland, experts say.

“It’s a hard blow for Uber’s business model,” work law expert Thomas Geiser told Swiss public television SRF’s RundschauExternal link programme on Thursday.

“This means that every other case involving an Uber driver will be treated the same,” said the St Gallen University professor. “It means that the [Uber business model] cannot work. Uber has to, like every other employer, meet its obligations and pay social insurance.”

The Rundschau programme reported 30 similar cases.

Suva External linkargued in its decision that taxi drivers who are connected to a headquarters count “in principle not as self-employed”, and are therefore employees. It said that drivers carry no economic risk and are, from a work organisation point of view, dependent on the headquarters.

This goes against UberExternal link’s main argument that it is a technology company that connects passengers and vehicles via its app.

Suva’s decision is binding for Switzerland’s social security system, like the state pension plan and disability insurance. 

Uber’s reply

Uber has stated that it does not employ drivers, and that drivers are responsible for paying social insurance and taxes.

In an interview on Rundschau, the general manager from Uber Switzerland, Rasoul Jalali, reiterated that Uber is a tech company and not a taxi firm. Uber has no authority over its drivers and so cannot be considered their employer, he continued.

California-based Uber, which was founded seven years ago, has caused controversy since its arrival in Switzerland. In Geneva, the service was banned at the end of March 2015 because it was said to violate cantonal taxi regulations. In February of this year, taxi drivers congregated in Bern to protest against “unfair competition” from the ride-sharing service.

Uber has also faced opposition in other countries. But the service argues it offers much-needed competition for the taxi industry. Uber slashed fares by up to 20% recently in Zurich, Geneva and Lausanne.