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Summary
- Uber Technologies Inc (NYSE:UBER) announces minimum wage, pensions, and holiday benefits for drivers.
- Drivers henceforth to be defined as workers and not as self-employed.
- The announcement comes a month after UK Supreme Court said drivers should be termed and seen as workers.
Uber Technologies Inc’s (NYSE:UBER) drivers in the UK would now be classified as workers and not independent contractors. They would also be paid fixed minimum wage, pensions, and holiday benefits. The reclassification would largely benefit 70,000 drivers in the UK and also have wider implications on gig economy.
Uber’s announcement comes a month after the UK Supreme Court upheld a ruling that drivers should be termed as workers and not self-employed. Following which, the company announced that all its drivers would be entitled to the National Living Wage of £8.72 an hour. The company also said that it does not see prices changing due to this.
The company said that minimum wage would be calculated based on the engagement time after a trip is accepted and post expenses. However, the court had said that drivers would be considered on duty from the moment they switch on the app, instead of when they start ferrying passengers. It also said that the modifications in definition would not be applicable to delivery agents of its food business, Uber Eats.
Also read: Food Delivery: Which Company Is Winning The War?
In 2016, a London employment tribunal ruled in favour of 25 drivers who had filed a case demanding that they should be eligible for employment benefits like recess, minimum wage, and paid leaves. Before this, Uber used to define drivers as self-employed, which legally did not give them benefits and much protection.
In an op-ed published in the Evening Standard, Uber’s CEO Dara Khosrowshahi said that the company, instead of challenging last month’s verdict, decided to change things and decided to enshrine social welfare benefits to drivers without diluting the flexible nature of the work.
Also read: Uber Canada Proposes Flexible Work+, Receives Mixed Reaction
Experts and union leaders have hailed the announcement, saying that the company’s decision would have larger consequences for the whole of the gig economy. Lawyers who represented Uber drivers said the announcements were a huge milestone in the fight for workers’ rights.
Employment experts said that this decision would act as a precedent for other gig economy giants who would also re-evaluate their definitions of workers. Union leaders said that this would be the end for all kinds of self-employed definitions, and other gig economy players should pay heed to the announcements.
