Switzerland: Uber after ban in Geneva with a new business model
After a ruling by the highest court in the legal dispute between Uber and the canton of Geneva, the transport service provider had to stop operating in the Swiss city. The federal court ruled at the end of last week that the law on taxis and transport vehicles is likely to apply to Uber. According to this, drivers could not work as self-employed, but had to be employed. Uber is already working on an alternative business model and announces the resumption of operations.
According to the judgment, Über must now observe the same legal obligations as taxi and transport companies. In particular, this involves the social security of the driver and compliance with the working conditions customary in the industry. The company then ceased operations in Geneva last weekend. According to media reports, the authorities have checked compliance with the regulations.
Ban since 2019
The Geneva cantonal authorities had already banned Uber from operating in November 2019, referring to the legal provisions. The Geneva cantonal court dismissed an objection by Uber’s Swiss subsidiary. The Federal Supreme Court, as the highest instance, then dismissed a new complaint.
The decision applies retrospectively from October 2019. It must therefore correspond to outstanding social security contributions since then. The Geneva Department of Economic Affairs told the media that there were no estimates of the amount that Uber would have to pay. However, the company has had two and a half years to stand up for compliance.
“Historic Decision”
The canton of Geneva welcomes the judgment as a “historic decision” that is considered a model for all cantons. “The Federal Supreme Court is sending a strong signal to the entire platform economy,” said Geneva Economic Director Fabienne Fischer. Various media reports also measure the verdict against over a “signal effect for the whole of Switzerland”.
The Unia trade union, which has “denounced the machinations of this company” since Uber entered the Swiss market nine years ago, also welcomed the decision of the Federal Supreme Court. She expects the federal government and the cantons to “immediately take quick and effective measures to ensure that Uber reimburses the hundreds of millions that were withheld from workers and social security funds”.
Uber denies the obligation to pay contributions and is meanwhile preparing to start over in Geneva. In a statement, the company emphasized that the Federal Supreme Court’s decision relates exclusively to the regulations of the canton of Geneva: “It does not relate to, nor does it cause, the payment of social security contributions.” The judgment will not have any impact on Uber’s business activities in other cantons.
Nevertheless, Uber is adapting to the new legal situation – the company is also pursuing this tactic in other countries such as Germany and Great Britain. In Geneva, Uber is now developing an approved notification that all “drivers who wish to become employees of independent Swiss partner companies”. These companies are said to be registered as taxi or transport companies under cantonal law and “guarantee drivers all social security contributions, minimum wage and other safeguards.”
“The vast majority of drivers ‘wish to remain independent’ and continue to be their own boss,” the company said. It is therefore to be expected “that not all drivers will decide to be employed”. Nevertheless, Uber expects services in Geneva to start “already this weekend”.
Uber is also under pressure in other cantons. The Zurich Social Security Court last decided at the end of 2021 that there was an employment relationship between Uber and the drivers. The company would also have to pay social security contributions. The cantonal court of Vaud had already reached a similar judgment in autumn 2020. Here, too, the judgments are not yet final due to objections.
Controversy “Uber Eats”
In a second federal court ruling affecting Uber Eats’ delivery services, the federal court also sees the couriers as employees. A previously received judgment by the Cantonal Court of Geneva on Uber Eats did not stand up before the highest court. The judges in Geneva had declared the courier service to be an employment agency, against which Uber Switzerland lodged a complaint. This has now been approved by the Federal Supreme Court.
The federal court concluded that while the couriers are to be considered employees, there is no staffing agreement between Uber and the catering establishments. “In particular, there is a lack of transfer of the authority to issue instructions to the couriers to the catering establishments and the integration of the couriers into the organization of the restaurants,” the Federal Supreme Court ruled.
As Uber announced, in the case of Uber Eats, they no longer work with independent couriers anyway.
(vbr)