Subordination confirmed

If independent taxi drivers are affiliated with a central headquarter, they are considered to be their employees, so the Swiss Federal Supreme Court in a decision of November 9, 2017. This will make them much better protected in the future. For consumers, this decision means higher taxi prices. So far, the drivers were considered self-employed, who were connected with their headquarters only by so-called follow-up contracts.

In 2014, the Swiss Accident Insurance Institute (Suva) qualified the taxi drivers for the first time as employed persons under social security law and the head office would have to pay the social contributions accordingly.

Three drivers and a taxi center had lodged a complaint with the Zurich Cantonal Court, where they were refused This court came to the conclusion that there were numerous contractual obligations between the center and the drivers, suggesting a subordinated relationship. For example, drivers are required to attend training courses, use the name of the taxi center for their vehicle, and have rules on behavior and behavior towards customers.

Also, the notice period of three months speaks for a dependent position. In addition, the head office presents itself on the internet with offers for private individuals and companies and employs staff who are responsible for the acquisition.

Significant investment denied

Apart from the car buying, the drivers do not made any other significant investments and they have no staff, so the Swiss Supreme Court. The plaintiff argued they had invested between CHF 35'000 and CHF 50'000 when purchasing their vehicles, what must be considered an entrepreneurial risk.

However, in its judgment published on Tuesday, the Federal Supreme Court upheld the decision of the lower court. The purchase and maintenance of a taxi does not constitute a sufficient entrepreneurial risk.

The price of the purchase also corresponds to the cost of a private vehicle. Further investments for premises, personnel or advertising did not apply. Thus, the drivers, apart from the monthly administrative contribution of CHF 775 to the headquarters, would have to incur any other major fixed costs.

Far-reaching consequences for headquarters

According to Christoph Wieland, President of the Taxi Division of the Swiss Commercial Vehicle Association, up to 2' 000 taxi drivers in Switzerland are working through central headquarters.

The consequences of this highest court precedent are far-reaching for the taxi centers, their clients and their drivers. Taxi headquarters will charge more and/or perhaps earn less, whilst the taxi drivers' social protection is significantly improved, at least in the short run.

UBER indirectly affected

It is quite probable that the Swiss Supreme Court will decide similarly quite soon in a pending UBER case.  

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