Worker status for UK Uber drivers
Print Edition
Uber has said it is granting its drivers in the United Kingdom worker status, with benefits including a minimum wage — a world first for the United States ride-hailing giant.
Weeks after a top court ruling that could shake up Britain’s wider “gig economy” of 5.5 million people, Uber said on Tuesday its drivers would also get holiday pay and a pension.
It is a massive change in the business model of a company that had argued before Britain’s Supreme Court that its drivers were self-employed.
From yesterday, “more than 70,000 drivers in the UK will be treated as workers, earning at least the national living wage when driving with Uber,” the taxi app said in a statement.
“This is a floor and not a ceiling — drivers can earn more.”
The court ruled last month that Uber’s drivers are entitled to worker’s rights.
The decision capped a protracted legal battle between UK drivers and the Silicon Valley taxi and delivery company.
Uber said its action over workers’ rights “means drivers will earn with greater security, helping them to plan for their futures while maintaining the flexibility that is integral to the private-hire industry.”
The higher costs for Uber come as it faces sliding driver bookings owing to the COVID-19 pandemic, despite strong demand for the Uber Eats food delivery service during national lockdowns.
Uber did not expect the change in driver compensation to affect its net income this year, the company said in a US regulatory filing.
“We’ve come to recognize that platforms like ours will work differently in different countries,” Uber Chief Executive Dara Khosrowshahi said in an Evening Standard editorial.
“The future of work is too big of an issue for a one-size-fits-all solution, and that’s OK,” said Khosrowshahi — who has previously argued for a “third way” to classify gig workers, rather than as employees or independent contractors.
The Services Employees International Union, which has been working to secure labor protections for Uber drivers in the US, welcomed the news.
“This debunks nearly a decade of scare tactics from rideshare companies like Uber and makes clear that Uber can choose at any time to properly classify their drivers and pay them a living wage with good benefits,” SEIU president Mary Kay Henry said.
The British ruling comes after California’s top court last month upheld a referendum that let “gig workers” like Uber be treated as contractors.
Drivers for ride-share and meal delivery apps had filed suit attempting to nullify the legislation known as Proposition 22.
Proposition 22 — passed in November and backed by Uber, Lyft and other app-based, on-demand delivery services — effectively overturned a state law requiring them to reclassify their drivers and provide them employee benefits.
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