1. UBER DRIVERS ARE WORKERS
The Supreme Court ruled on Friday that Uber drivers are workers, not self-employed. The ruling could mean that thousands of Uber drivers are entitled to minimum wage and holiday pay, and leave the app facing a large compensation bill.
Former Uber drivers James Farrar and Yaseen Aslam took Uber to an employment tribunal in 2016. They argued they worked for Uber so were entitled to the workers rights benefits, but Uber fought back and argued that they are a booking agent and their drivers were self-employed and it therefore was not responsible for paying any minimum wage nor holiday pay. By not being classified as a transport provider, Uber is not currently paying 20% VAT on fares.
Farrar and Aslam won the employment tribunal against Uber in 2016, but Uber appealed. The Employment Appeal Tribunal upheld the ruling in 2017, so Uber took the case to the Court of Appeal, which upheld the ruling in 2018. Uber finally took it to the Supreme Court, who has unanimously dismissed Uber’s appeal.
Lord Leggatt said that it was an intermediary party and stated that drivers should be considered to be working not only when driving a passenger, but whenever logged in to the app until they log off. This is a key point because Uber drivers typically spend time waiting for people to book rides on the app.
The court considered several elements in its judgment including that Uber set the fare, meaning they dictated how much drivers would earn, the drivers had no say in the contract terms that Uber set out, and that Uber can terminate the relationship with their drivers if the drivers star rating does not improve.
THOUGHTS AND IMPLICATIONS
James Farrar explained this being a “win-win” for drivers, passengers and cities as Uber now has the correct economic incentives not to oversupply the market with too many vehicles and drivers. This will be extremely beneficial therefore to pollution, congestion and the rates of poverty with drivers having rights to minimum wage and holiday pay. Farrar explained that due to the pandemic, fares were down 80% and many drivers had been struggling financially and felt ‘trapped’ in the Uber system. Many members were only earning £30 gross a day. which was not enough to pay their costs.
The Supreme Courts ruling could have wider implications for zero-hour contract job markets and the gig economy like other private hire drivers, couriers and delivery drivers. This is now a truly pressing issue for Britain, especially in the disruptive wake of Brexit and with many Covid-related job protections likely to be lifted during this year.
The Uber ruling highlights the UK governments uncertain attitudes when it comes to working conditions and employment rights. In 2019, Boris Johnson pledged to introduce an employment bill that would protect and enhance workers’ rights as the UK left the EU, “making Britain the best place in the world to work”. Yet nothing has happened, and not just because of the pandemic.
This ruling could also potentially see Uber passengers pay more for Uber rides to cover the higher wages being paid to Uber drivers to comply with minimum wage standards.
This may also mean that Uber is now responsible for VAT. Mr Maugham, a barrister specialising in tax and employment law, applied to HMRC to ask for a judicial review and that HMRC demand that Uber pay VAT. “It makes it extremely difficult for Uber to continue to resist paying what I understand to be more than £1bn in VAT and interest.”
Photo by Austin Distel on Unsplash
2. MEDICAL CANNABIS COMPANY SHARES SOAR ON LSE
Medical cannabis and Israeli company Kanabo Group saw its share price soar some 66.64% on Tuesday with its first day on the London Stock Exchange (LSE).
Kanabo group manufacturers vaporised marijuana pods and inhalers for medicinal use. Investors’ interests are not slowing, with share prices soaring as more become intrigued by the profitability of the expanding sector.
In 2018, Cannabis was legalised for medical use in the UK. But, in September 2020, the Financial Conduct Authority (FCA) allowed medicinal cannabis companies to list on the main market of the LSE. The move follows a flurry of activity in the sector. Last week medical cannabis firm MGC Pharmaceuticals announced its intention to float on the LSE and before that UK-based Cellular Goods, which is backed by David Beckham, announced it too was seeking a listing.
According to Neil Wilson, chief market analyst at Markets.com, London could be set for a “boom time” for cannabis listings. “[The FCA’s decision] could create a major European trading hub for cannabis companies which is currently dominated by Toronto and New York,” he added.
Kanabo’s CEO Avihu Tamir said: “With the support of the Financial Conduct Authority and LSE, the medical cannabis industry is set to take off in the UK and in Europe, similar to what’s happened in North America in recent times. This is just the beginning.”
Globally, the legal cannabis market is worth £13bn. But, it is set for exponential growth with a 2027 forecast of £46.4bn. This is due to a number of reasons, including the fact that recreational cannabis has become widely accepted throughout many parts of North America and is gradually becoming more accepted globally for medical use. In comparison to Canada and the US, the market share in Europe is still very small, but it is forecast to grow to £1.7bn during the next 4 years.
THOUGHTS AND IMPLICATIONS
In October 2018, use of cannabis for recreational purposes became legal in Canada. Therefore, coupled with cannabis already being legalised in some countries and the support for cannabis being used for medical purposes, this begs the question as to whether recreational cannabis use will become widely accepted worldwide over time. Perhaps not whether it will, but when.
Due to the quick growth of the sector, Cannabis companies in the lucrative European marketplace will likely become saturated very fast, leaving only the best to survive.
Photo by Matthew Brodeur on Unsplash
3. CHINA NOW EU’S BIGGEST TRADING PARTNER
China is now the EU’s biggest trading partner, overtaking the US. Trade between China and the EU was worth £511bn last year, despite falling during the covid-19 pandemic. This was compared with $671bn (£478.7bn) worth of imports and exports from the US.
Although China’s economy cratered in the first quarter due to the pandemic, its economic recovery later in the year fuelled demand for EU goods. China was the only major global economy to see growth in 2020, stoking demand for European cars and luxury goods. Nick Marro, global trade lead at the Economist Intelligence Unit, said the fact that China was able to come back in the second quarter of last year as other markets went into lockdown has allowed exports to capitalise on surging global demand for electronics, entertainment and health care goods.
The EU and China moved to further deepen their trade relationship on December 30 by concluding negotiations on the Comprehensive Agreement on Investment (CAI), which promises to give companies greater market access. The landmark deal still needs final approval.
THOUGHTS AND IMPLICATIONS
Critics say the EU gave Beijing a geopolitical win by wrapping up the CAI deal when concerns remained over alleged forced labour in Xinjiang. Beijing has denied the claims, saying it runs vocational training centres in the region to combat religious extremism and terrorism. The deal was also pushed forward despite warnings from Washington.
The administration of US President Joe Biden has signalled his intent to counter a rising China and spoken of the need for stronger coalitions with the EU against Beijing on the trade front. The EU had a difficult trade relationship with the US under the former Donald Trump administration, which launched tariffs on Airbus aircraft and levies on a range of European exports, including French wine and Spanish olives.
Read more about the issues and concerns concerns about overdependence on China and fallout from Biden’s intent to counter a rising Beijing here.
Photo: Getty Images
4. FACEBOOK BLOCKS AUSTRALIAN USERS FROM NEWS
Facebook has blocked Australian users from sharing or viewing news content.This is due to the Australian government’s proposal to make big tech companies such as Facebook and Google pay publishers for content.
Facebook deemed it unfair to pay publishers for this content if they do not ask for the news content nor do they make much gain from it.
Facebook and Google are seen to dominate digital advertising and Australian authorities sought to “level the playing field”. 17 million Australians access news from Facebook, including crucial information from emergency services. Seeming as Australia’s population only stands at 25 million, this is a huge percentage of people. Thus, Facebook’s decision to block news content has drawn staunch criticism.
Some unintended consequences occurred and it quickly became clear that emergency-services’ pages found that their Facebook had been affected. Will Easton, managing director of Facebook Australia, said: “Pages such as government, public-safety and education pages should not be impacted by this announcement.” Many pages were quickly restored.
Despite Google previously threatening to pull out of Australia, they have signed content payment deals with three Australian outlets as well as a global deal with News Corp.
THOUGHTS AND IMPLICATIONS
Will this ban from Facebook see the Australian government making any exceptions to their proposed law to make distributors pay publishers for content?
Nine Entertainment warned the absence of news from Facebook would worsen the situation of fake news and false information being spread online. Much of the misinformation being spread on Facebook is memes or text that would not be caught by the ban. People who want to correct such misinformation posted by relatives or friends would not be able to reply with a link to a news article.
Photograph: Dado Ruvić/Reuters
5. BITCOIN PASSES $1 TRILLION
Bitcoin has hit $1 trillion for the first time in market value as cryptocurrency surge continues. The digital currency was trading at just under $54,000 per coin as it hit the new level.
Bitcoin is up nearly 900% since March 2020 and is up 60% this month. It has been gaining gradual acceptance from traditional institutions. The oldest bank in the United States, the Bank of New York Mellon, announced earlier this month that it was moving into the space. Elon Musk’s Tesla converted some of its balance sheet cash into bitcoin earlier this year and said it would start accepting the digital tokens as payment.
THOUGHTS AND IMPLICATIONS
Not everyone on Wall Street has been convinced of bitcoin’s future prospects. Citadel Securities founder Ken Griffin said Friday that he was not interested in cryptocurrency, while researchers at JPMorgan have said bitcoin’s rally is “unsustainable.” Bitcoin is an “economic side show,” it added, calling innovation in financial technology and the growth of digital platforms into credit and payments “the real financial transformational story of the COVID-19 era.”
Photo: Getty Images (SKODONNELL)
6. FORD TO GO ALL-ELECTRIC BY 2030
Ford has said it will only sell entirely electric vehicles by 2030. The US car giant has said it was going “all-in” on electric vehicles and announced that it would invest $1bn (£720m) converting a vehicle assembly plant in Germany to become its first electric vehicle facility in Europe. The automaker also said it will be investing $22bn in electric tech by 2025.
This follows the UK governments plan and pledge to ban the sale of non-electric cars by 2035. It is part of Boris Johnson’s call for a “green industrial revolution” to create new jobs in future technologies and tackle the climate crisis. The UK has set a target to be a net zero emissions economy by 2050.
Volvo will follow Ford’s footsteps by also going fully electric by 2030, and Jaguar Land Rover have gone a step further and said their Jaguar vehicles be fully electric by 2025.
Photograph: Friedemann Vogel/EPA
Thanks for reading! If you’re wondering how you can stay commercially aware, check out my blog post ‘How to Be Commercially Aware’.
*Disclaimer – All views expressed on this site are my own and do not represent the opinions of any entity whatsoever with which I have been, am now, or will be affiliated. All information provided aims to educate and has been cross-checked for accuracy, but this site accepts no responsibility for any discrepancies.