Uber said Tuesday that drivers in the U.K. who use its ride-hailing app will be treated as workers, a designation that will give them some benefits such as holiday pay. However, even as Uber seemingly concedes to a Supreme Court ruling last month, a new fight could already be brewing over the company's decision to calculate working time from the point a trip commences -- rather than when drivers log on to the app.
Uber said that beginning Wednesday all drivers in the U.K. will be paid holiday time based on 12.07% of their earnings, which will be paid out every two weeks. Drivers will also be paid at least the minimum wage (called the National Living Wage) after accepting a trip request and after expenses, Uber said in a statement. Eligible drivers in the U.K. will automatically be enrolled into a pension plan with contributions from Uber. These contributions will represent approximately 3% of a driver's earnings.
In the U.K., there are three designations: self-employed, employed and worker. The "workers" designation doesn't make them employees, but it is still entitles them to the minimum wage, holiday pay and, if eligible, a pension.
Uber said Tuesday that based on current expectations, the company is not changing its previously announced expectations for Adjusted EBITDA for the first quarter or for 2021.
Uber has been entangled in a fight over worker classification in the U.K. since 2016. Last month, the U.K.'s Supreme Court dismissed Uber's appeal, which reaffirmed earlier rulings that drivers using the app are workers and not independent contractors. With no place to turn, Uber has conceded — sort of. Uber will only guarantee that drivers' working time and other benefits will accrue once they accept a trip and not based on when they have signed into the app to begin working. That already has labor activists fuming.
"While we welcome Uber’s decision to finally commit to paying minimum wage, holiday pay and pensions we observe that they have arrived to the table with this offer a day late and a dollar short, literally," according to a statement from the App Drivers & Couriers Union and signed by James Farrar and Yaseen Aslam, the two drivers who brought a case against Uber. "The Supreme Court ruled that drivers are to be recognized as workers with entitlements to the minimum wage and holiday pay to accrue on working time from log on to log off whereas Uber is committing only to these entitlements to accrue from time of trip acceptance to drop off. This means that Uber drivers will be still short-changed to the tune of 40-50%. Also, it is not acceptable for Uber to unilaterally decide the driver expense base in calculating minimum wage. This must be subject to collective agreement.
"While Uber undoubtedly has made progress here, we cannot accept anything less than full compliance with legal minimums. We would also expect to see Uber make progress towards trade union recognition, a fair dismissals appeals process and a data access agreement."
Farrar told TechCrunch that the issue has not been resolved. The next step will be to go back to the Employment Tribunal to ensure that drivers are paid what they are legally entitled to.
Even as Uber deals with continued labor issues in the U.K., the company will likely turn much of its attention to cases that are still playing out in courts in other European countries — decisions which could put pressure on Uber's bottom line. Meanwhile, EU lawmakers are also consulting on how to improve conditions for gig workers, so Uber's concession in the U.K. has likely fed into pan-EU negotiations.
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