“Landmark Decision Recognizes Worker Status of Ride-Hailing Drivers”, 25 July 2024

The South Korean Supreme Court has ruled that drivers of the ride-hailing service Tada are employees of Socar, the parent company of Tada's operator, under the Labor Standards Act. Tada, a Seoul-based ride-hailing platform, is operated by VCNC, a subsidiary of the Korean ride-sharing company Socar. This marks the first instance in which the Supreme Court has acknowledged the worker status of online platform laborers.

…On the 25th, the Supreme Court dismissed Socar's appeal against the chairman of the Central Labor Commission, affirming the lower court's ruling in favor of the driver.

…A, a ride-hailing driver, signed a freelance contract with VCNC through a service provider in 2019 but was removed from the service in July of that year due to a reduction in pay. In May 2020, the Central Labor Commission ruled that A was a worker and that Socar was the employer. Socar subsequently filed an administrative lawsuit challenging the decision.

…The Supreme Court ultimately determined…that the Tada driver was indeed a worker of Socar. The Court emphasized that the established criteria for determining worker status under the Labor Standards Act should also apply to online platform workers. This includes evaluating whether the individual has provided labor in a subordinate relationship for wages, irrespective of the contract's form…

…The Court found that Socar, not the contractor, dictated the nature of A's work and exerted substantial control and supervision. The fact that A was bound by specific work times and locations further established the presence of dependency.

…This ruling is expected to influence future cases, potentially leading to the recognition of worker status for platform workers across various industries.

…The labor community welcomed the decision, asserting that it exposes Tada's innovation as a means to circumvent labor laws…. The Korean Confederation of Trade Unions issued a statement expressing hope that the ruling would alert platform companies to the need to comply with labor laws, given their role as de facto employers who direct and supervise workers….