Everybody is a loser from the Uber ruling; free contract is the foundation of freedom


Uber ruling: Drivers and consumers alike stand to lose out

That the courts have ruled that Uber must treat its drivers as employees is lamentable for all sorts of reasons, but there are far more losers than a narrow assessment of the case suggests.

If we give the courts the benefit of the doubt and assume they are simply revealing a contractual shortcoming, then with luck the company will simply be able to rework its contracts and continue as before.

If not, then a huge range of people stand to lose out. Passengers face higher fares and the effective loss of Uber’s service from their range of options whilst drivers lose the freedom of freelance work; which suits many, not least because they’re not on PAYE. Uber may lose profits and market share.

Nonetheless, in the media at least there is a whiff of ‘ought’ about this: the idea not that Uber drivers were employees but that, given their conditions of work, they ought to be employees. But if strict limits aren’t placed on the courts’ power to rewrite contracts; liberty takes a serious wound.

On the surface, the idea that courts can step in and retro-actively amend contracts they deem unjust has its appeal – and there is surely a place even in libertarian philosophy for judicial review of contracts in certain circumstances.

The proper realm for this is surely where deceit is involved, and one party is unaware of true nature or extent of their obligations.

In On Liberty, JS Mill uses the example of tackling a man about to cross an unstable bridge: the tackler is not infringing the liberty of the other because, in Mill’s view, the man’s intention was not to fall into the river. (Should the man choose to proceed once appraised of the risks, of course, that’s on him.)

This does not mean that the courts should not protect anybody from the unforeseen consequences of a contract whose terms were fully understood at the outset. It certainly shouldn’t give them scope to allow one party to go back and impose different terms that are more to their liking.

Nobody signs up as an Uber driver in the belief that they will be a PAYE employee with things like paid holiday entitlements. In the absence of this judgement amounts to the courts, either on their own bat or following a legislative imperative, deciding that Uber’s contracts aren’t nice and retroactively imposing one that pleased them better.

This produces the list of losers prescribed above. But the practice of re-writing contracts in the courts has a much longer list of victims: everybody. Because if we take Mill’s view that freedom is in large part the ability to make our own informed decisions, such judgements pull the rug from under our feet.

We are robbed of agency because we’re no longer able to make contracts with each other that both can depend upon. Instead we are always left to wonder whether or not we might find judges imposing obligations upon us that we did not undertake.

Not only might contracts and arrangements be altered after we have entered into them, but we might find ourselves retrospectively entered into agreements the courts feel we ought to have entered but which we would not have chosen to.

A good example of this is proposals that co-habiting couples should enjoy the same rights as married couples. It sounds nice, but consider that many people choose to cohabit and not marry precisely to avoid making such undertakings to each other.

Should the romance fade one party might emerge wishing they enjoyed the same protections and entitlements as a partner in a marriage, but that’s no reason whatsoever to grant them. After all, the other party might not even have given them the opportunity to amass such grievances had they known they were putting themselves on the hook in this way.

It can’t be said often enough that freedom must include the freedom to make mistakes. In this case, that means holding us accountable to the contracts we make – or our failure to make them.

Drivers who don’t like Uber’s contracts can seek employment elsewhere. Partners who want legal commitments can leave those who don’t offer them. Neither has the right to unilaterally impose favourable terms on their relationship with any person or organisation, or have judges do it for them.

Courts should confine themselves to the realms of ‘is’, and leave ‘ought’ to the politicians and philosophers. If they have been empowered or mandated by legislation to make such judgements, such laws should be changed.

The rule of judges is not the same as the rule of law. The arbitrary imposition of new terms on an private agreements is not only unjust to the party disfavoured in the judgement: it robs all of us of the clear, reliable rules we need to be free.

Henry is the Assistant Editor at Conservative Home. Follow him on Twitter: @HCH_Hill

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The views expressed in this article are that of the author and do not necessarily reflect the views of Conservatives for Liberty