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Uber decision shows importance of vetting procedures, say experts

25 Sep 2017 By Emily Burt

‘Vulnerability’ of gig economy workers also back on the agenda as taxi app loses London licence

Experts have reminded HR departments of the importance of robust background checking procedures, after Uber had its licence to operate in London pulled by Transport for London (TfL) last Friday.

In a statement released on Friday, TfL said the ride-hailing app was not fit and proper to hold a private hire operator licence. Among the reasons given were the company’s deemed failure to report alleged criminal offences carried out by its drivers and a lax attitude towards background checks and obtaining medical certificates.

Sarah Dowzell, COO and co-founder of cloud HR software company Natural HR, said: “It is so important to background check your employees and be clear of their intentions in working for your company. Conducting rigorous checks should be taken as a blanket approach across businesses: because it's not just about checking the suitability of employees, it’s about safeguarding other parties involved with the organisation.

“That risk is not just about company reputation, it's about the customers, which in Uber’s case relates to people using the app, but can extend to any other stakeholders or individuals involved with your business. I think ethically this is an issue that should be at the front of HR's mind.”

“Dara Khosrowshahi [chief executive of Uber] has said the rejection is the cost of a ‘bad reputation’,” Keely Rushmore, senior associate at SA Law, told People Management. “However, from TfL’s perspective, its decision is about reality and genuine concerns, not reputation. Uber would perhaps be better placed in its appeal against the decision by focusing on addressing those concerns, rather than on seeking the support and peer pressure of its users.”

At the beginning of September, TfL said it had found that up to 13,000 Uber drivers had insufficient background checks and a separate investigation by The Sun, published last year, claimed Uber drivers had been obtaining falsified medical certificates.

Over the weekend, The Sunday Times published a letter from the head of the Metropolitan Police’s taxi and private hire unit, which accused Uber of selectively reporting criminal offences committed by drivers, choosing to report only those that would be “less damaging to [its] reputation”.

Uber’s existing licence expires on 30 September, but the company has 21 days to appeal TfL’s decision, and can continue to operate until it has exhausted the appeals process.

In an open letter tweeted by the company’s media team, recently appointed Khosrowshahi apologised “for the mistakes we’ve made” and added: “We will appeal this decision on behalf of millions of Londoners but we do so with the knowledge that we must also change.”

Meanwhile, Nick Elwell-Sutton, employment partner at Clyde & Co, said the decision flagged further concerns about the limited rights of gig economy workers. "Because they are classed as ‘workers’ rather than employees, there will be no right to a redundancy payment and no obligation to consult,” he said “Instead, Uber just needs to serve contractual notice to terminate.

“40,000 [drivers] are potentially losing their jobs, and while in future they could work as traditional minicab drivers, without the technology overlay of the Uber app they would be self-employed and end up with no rights at all rather than the limited ‘worker’ rights they currently have with Uber."

Frances O’Grady, general secretary of the TUC, said the decision should act as a “cautionary tale” for employers of gig economy workers. “It is perfectly possible to run a taxi company without treating drivers poorly and cutting corners on customer safety… Unions will expose nasty schemes that cheat workers out of basic rights like the minimum wage and holiday pay,” she said.

On Wednesday, the company is due to head to the Employment Appeal Tribunal to challenge a 2016 ruling, which decided that two of its drivers were workers, rather than self-employed, and therefore entitled to certain rights such as the minimum wage and sick pay.

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