Legal action launched over alleged unlawful treatment of FREENOW private hire drivers

Law firm Leigh Day has launched a group legal claim against FREENOW, a ride hailing app owned by BMW Group and Mercedes-Benz Mobility, arguing that the company is treating its private hire drivers unlawfully.

The lawyers say at least 20,000 FREENOW private hire drivers could be owed thousands of pounds for being denied workers’ rights such as holiday pay and the national minimum wage.

If the legal claim is successful, Leigh Day will claim backpay for unpaid holiday and compensation for any underpayment of the national minimum wage for the entire period private hire drivers who join the claim have worked for FREENOW. The claim against FREENOW is similar to Leigh Day’s successful claim brought against Uber.

FREENOW operates in over 150 cities across Europe. It provides private hire vehicles, e-scooters, car sharing, taxis, public transport services, e-bikes, and e-mopeds. FREENOW operates private hire services in London and the South East of England. Leigh Day argues that the way FREENOW private hire drivers work means that they are workers rather than self-employed contractors. FREENOW claims to be giving drivers the choice between becoming a worker or independent contractor.

Earlier this year FREENOW became the first company to give PHV drivers such a choice of being workers or independent contractors. This decision was informed by an internal survey conducted this year among FREENOW minicab drivers (PHV). The survey revealed that while the majority would like to remain independent contractors (59%), almost a third (31%) would prefer to have worker status, while 10% are undecided.

Those who choose worker status are entitled to:

• National Living Wage guarantee - each week FREENOW will ensure all driver earnings are equal to or greater than the National Living Wage

• Holiday pay - total earnings will be topped up by 12.07%, while drivers will retain the freedom to decide when and where to work, without any restrictions

• Access to FREENOW’s pension scheme - FREENOW will contribute 3% towards each driver’s pension, based on them making a 5% contribution (drivers with worker status can opt-out of the scheme at any time).

Leigh Day say FREENOW private hire drivers are eligible to join the claim if they have driven for the company in the last 10 weeks. The claim is ‘opt in’, meaning that drivers need to sign up in order to receive compensation should the claim be successful. The claim is not applicable to black cab drivers using the platform. All FREENOW private hire drivers are potentially eligible to join the claim whether they have signed FREENOW’S new ‘worker’ contract or the new ‘independent contractor’ contract. Leigh Day’s case is that all FREENOW private hire drivers are workers, irrespective of how FREENOW describes them in its paperwork. Leigh Day employment partner Annie Powell, who is leading the claim, said: “We believe that all FREENOW private hire drivers are workers and that they should therefore have the employment rights and legal protection that come with that status. We will argue that by labelling private hire drivers as “self-employed contractors”, the owners of the ride-hailing app, BMW and Mercedes, are responsible for denying private hire drivers basic rights like paid holidays in order to cut costs.”

Mariusz Zabrocki, UK General Manager at FREENOW, responded to the claims saying: “We are proud to be the platform of choice for many passengers in London and beyond, allowing them to easily access a black cab or a private hire vehicle when they need it. We are the first company to offer private hire vehicle drivers the choice of selecting the model that works best for them - worker or self-employed. All PHV drivers can move into worker status if that is their preference at any time, within the app with a couple of clicks.

“When given a choice, the self-employed model is the preferred option for the vast majority of FREENOW PHV drivers. Since we made this announcement, two months ago, only around 100 drivers selected worker status, despite direct information provided to PHV drivers, reminders in the app, over email and through public communication. It can’t be claimed that 20,000 drivers are denied worker status when it is literally two clicks away.

“We know these are challenging times and so FREENOW will continue to put drivers at the forefront of how we operate - we will not deny them their right to choose what is best for them regarding their employment status.”