Following a recent court decision that said Uber drivers should be treated as employees and entitled to such benefits, the company is paying its U.K. drivers the minimum wage, pensions, and holiday pay.
The ride-hailing giant made the announcement on Tuesday after losing an appeal at the UK Supreme Court last month after a years-long legal fight. The decision of the court has far-reaching consequences for the country’s gig economy.
The benefits will be extended to Uber’s more than 70,000 drivers in the United Kingdom immediately, according to the company. After accepting a trip request and costs, drivers can earn at least the minimum wage, which is actually 8.72 pounds ($12.12), with the potential of earning more.
Drivers would also receive two-weekly holiday pay equivalent to around 12% of their earnings. They’ll also be included in a pension scheme that the corporation and they will all contribute to.
Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, said in a filing to the SEC, “This is a vital day for drivers in the United Kingdom.” Drivers would also be able to operate on a flexible schedule, he said. “Because Uber is only one aspect of a wider private-hire sector, we hope that all other operators will join us in enhancing the quality of work for these vital employees who are a part of our daily lives.”
The drivers who filed the lawsuit were pleased with the coverage, but they felt it was insufficient.
The App Drivers And Couriers Union’s James Farrar and Yaseen Aslam said in a statement that Uber “arrived at the table with this deal a day late and a dollar short, literally.” They said the amendments did not go far enough to comply with the Supreme Court’s decision that pay should be measured from the time drivers log on to the app until they log off. They also said that the organization cannot dictate on its own the cost base for determining the minimum wage, which should be determined by a collective bargaining agreement.
Farrar and Aslam had brought their case to an employment tribunal, which ruled that drivers could not be listed as independent contractors, but rather as designated jobs, which means their job conditions are more informal than employees but also come with certain benefits under British law. Before the Supreme Court ruling, Uber had lost two rounds of appeals.
More incentives for Uber’s drivers are likely to increase costs for the San Francisco-based company, which is still struggling to make a profit and has previously run into regulatory issues in London, where authorities attempted to revoke its license. However, it stated that its earnings outlook for the year will not be changed.
The decision in the United Kingdom contrasts with the result of a November ballot initiative in California, which exempted app-based ride-hailing and food delivery services from classifying their drivers as workers rather than contractors.