Following a ruling in February at the Supreme Court, Uber has to classify its drivers as workers rather than self-employed.
The Supreme Court upheld the decision of the Court of Appeal by holding that drivers for Uber are workers and therefore entitled to paid holiday, minimum wage and rest breaks.
Uber has today said it will give its 70,000 UK drivers a guaranteed minimum wage, holiday pay and pensions – alongside other benefits not previously associated with gig economy workers.
The global taxi app announced that all of its UK drivers would earn at least the National Living Wage – currently £8.72 an hour – however, this is set to rise to £8.91 next month.
Uber will now pay at least the National Living Wage for over-25s, irrespective of a driver’s age, and drivers will be paid holiday time based on 12.07% of their earnings.
UK Uber drivers will now automatically be enrolled into a pension plan with contributions from Uber.
Jamie Heywood, Regional General Manager for Northern Europe at Uber, said: “Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives. Drivers have consistently told us that they wanted both the flexibility that we provided but also they wanted the benefits and we’ve been struggling to find a way of bringing those two together in a way that work for us and work for drivers.”
David Kelly, General Manager for EMEA at workforce management specialist, Deputy, said: “This ruling recognises how important shift workers are to the UK economy. It’s absolutely right that all workers are treated fairly and do not suffer from the ‘one-sided flexibility’ that was highlighted by the Taylor Review back in 2017. At the same time, it encourages businesses with a ‘gig’ model to find new ways to run more efficiently.
“Our data spanning 7.5 million shifts worked across 6,000 UK businesses between January 2020 and January 2021, shows that shift work during the pandemic has been volatile and unpredictable. Advanced planning of shifts has reduced dramatically and there have been enormous peaks and troughs in the number of hours rostered and worked across different sectors and forms of shift work.
“Our recent State of Shift Work Report also highlighted a call from 97% of shift workers that they should be given more respect. Today’s announcement is another step in the right direction for these workers.”
Professor John Colley, Associate Dean of Warwick Business School, said: “Unfortunately, the Uber approach is to avoid paying the minimum wage for ride hailing taxi drivers. This certainly presents the picture that ride hailing and food delivery firms are less about technology, which after all is not proprietary, and more about paying workers less than the law requires for the hours they are logged on. Perhaps that is where their competitive advantage really lies.
“At least they have accepted the need for holiday pay and some pension provision. The bulk of Uber drivers are known to earn their main living from ride hailing, it is not pocket money for most. We can expect more court cases from drivers which Uber will no doubt fight all the way to the Supreme Court. However, backpay is mounting if Uber should lose which will be a problem as London is Uber’s most important market outside the USA.”