Welcome to the gig economy – a space where flexible, on-demand work rules the day and jobs range from delivering food to driving passengers and developing websites. For many, the gig economy offers autonomy and flexibility. But here’s the catch – because gig workers are classified as ‘independent contractors’ rather than employees, they miss out on essential protections like minimum wage, holiday pay, and sick leave. This setup creates a risky trade-off, especially when workers are pressured to work long hours or accept unfavourable terms to secure steady income from specific companies, sacrificing the very freedoms independent work promises. In this guide, we dive into how group litigation is helping gig economy workers protect their rights and secure fairer treatment across the industry. 

Common gig economy issues addressed through group litigation 

The challenges facing gig economy workers are wide-ranging, often impacting their income, rights, and wellbeing. Group litigation has proven to be an effective way for workers to confront these issues, giving them a stronger voice and a fair chance to seek justice. Here’s a look at some of the main challenges group litigation is helping tackle.  

Wage theft and unpaid work 

One of the most common grievances in the gig economy is wage theft – not being paid for time spent waiting between jobs. For example, delivery drivers are often paid per task rather than per hour, meaning time spent waiting for orders, or even driving to pick them up, goes unpaid.  

Lack of minimum wage  

Unlike employees, who are guaranteed minimum wage protections, gig workers are classified as independent contractors and often paid per job, which can result in earnings below minimum wage. When costs like fuel and vehicle maintenance are factored in, gig workers can find their earnings substantially reduced.  

Denial of benefits 

Gig workers typically don’t receive benefits that traditional employees rely on, such as holiday pay, sick leave, or NI contributions. Without these essential protections, gig workers face financial instability and risk, especially when they’re unable to work due to illness or personal circumstances.  

Misclassification as independent contractors 

For many in the gig economy, losing out on rights and benefits and not being paid for every hour is worth it. Gig work allows individuals to operate independently, with less supervision than traditional jobs. People can manage tasks as they see fit, creating a sense of ownership and control. However, the trade-off stops making sense when companies impose strict guidelines, scheduling demands, or other conditions that strip away flexibility.  

And here lies the core issue: for many gig workers, the biggest problem is their misclassification as ‘independent contractors’.  Today, too many companies are denying their workforce employee benefits and protections, while imposing strict processes that refuse workers the freedoms they were promised – leaving them with none of the benefits and none of the autonomy.  

How group litigation empowers gig workers 

Group litigation lets gig workers come together, demand fair treatment, and create change that benefits everyone involved. Here’s how it empowers gig workers facing unjust conditions in the gig economy.  

Amplifying worker voices 

For individual gig workers, standing up against a major company can seem impossible. But in group litigation, workers with similar grievances band together and form a united front. When hundreds or even thousands of workers speak up as one, their voices become louder, attracting media attention and public support. This amplification helps strengthen the case and brings visibility to issues that might otherwise be swept under the rug. 

Levelling the playing field 

Taking on a large company as an individual is daunting and costly, but group litigation balances the scales by spreading the financial burden across the group. Legal fees, which would be prohibitive for one person alone, are divided among all claimants, making it possible for gig workers to access top-tier legal representation. Additionally, law firms often offer no-win, no-fee agreements in group claims, covering upfront costs and getting paid only if the case succeeds. So gig workers aren’t financially at risk for seeking justice. 

Securing systemic change 

Beyond financial compensation, group litigation has the power to bring about real, long-lasting change in the gig economy. When companies are forced to address widespread claims, they often face public scrutiny and pressure to reform their practices to avoid further lawsuits. These changes, such as adjusting pay rates or offering benefits, can improve conditions for all gig workers, not just those involved in the case, setting a precedent across the industry. 

Examples of successful gig economy group litigation 

Group litigation has already led to landmark cases in the gig economy, challenging unjust practices and improving conditions for gig workers. Here are some notable examples: 

Uber drivers’ case for employment rights in the UK 

In one of the most high-profile group litigation cases in the gig economy, Uber drivers in the UK took the company to court to argue for recognition as employees rather than independent contractors. The case, which began in 2016, challenged Uber’s classification of drivers as self-employed, and argued they were entitled to basic rights such as minimum wage, holiday pay, and rest breaks. 

In 2021, the UK Supreme Court ruled in favour of the drivers, stating they should be classified as ‘workers’ and entitled to employment protections. Key factors in this decision included: 

• Uber set the fares, controlling how much drivers could earn. 

• Uber dictated the contract terms, giving drivers no input. 

• Uber could penalise drivers for rejecting too many rides. 

• Uber could terminate drivers with poor ratings. 

These factors showed the level of control Uber had over drivers, which influenced the court’s decision to classify them as workers rather than independent contractors. Uber subsequently announced changes, including minimum wage guarantees and holiday pay for UK drivers. This ruling was a groundbreaking moment for gig workers, setting a precedent that influenced and inspired similar cases across the industry. 

Various gig-worker class action cases in the US 

Group litigation is still a relatively new phenomenon in the UK (although the market is growing). But there have already been several successful gig economy group litigation cases in the US. For example:  

• FedEx drivers misclassification case: After thousands of FedEx drivers argued the courier and shipping company had significant control over their working conditions – from requiring specific uniforms and equipment to setting schedules and delivery guidelines – a judge approved a $227 million settlement from FedEx.  

• DoorDash arbitration agreement settlement: DoorDash drivers in the US filed thousands of arbitration claims arguing they were misclassified as independent contractors and entitled to employee benefits. DoorDash tried to block these claims, but a court ruled it had to cover the arbitration fees due to its own arbitration agreement, which mandated arbitration rather than collective action in court. DoorDash ultimately agreed to settle the claims, paying tens of millions to ‘Dashers’. 

• Instacart tips and wage theft settlement: Instacart faced lawsuits for counting customer tips toward minimum earnings instead of adding them on top, which reduced workers’ pay. In 2020, Instacart settled for $11 million, agreeing to change its tipping policy and compensate underpaid workers. In 2019, it also paid $46.5 million to settle claims it had misclassified workers as independent contractors instead of employees. 

Current gig economy group litigation cases in the UK  

With the courts increasingly sympathetic to workers’ rights in the gig sector, several high-profile cases are currently in progress in the UK. These actions highlight key issues and pave the way for potential changes across the industry. Here’s a look at some of the major ongoing group litigation cases impacting Britain’s gig economy: 

Bolt drivers’ fight for worker status 

Bolt, a ride-hailing company, is facing group litigation from drivers seeking recognition as workers rather than independent contractors. Like their counterparts at Uber, Bolt drivers are demanding minimum wage, paid holiday, and sick pay, arguing that the company’s control over fares, customer interactions, and work conditions makes them effectively employees. Lawyers are calling for Bolt to be held to the same standards applied to Uber in its landmark case. This case could force Bolt to re-evaluate its driver relationships and potentially reclassify them as workers.