Uber agrees to consider 70,000 UK drivers as workers; will receive minimum wage, holiday pay, pensions

In wake of the recent Supreme Court ruling, Uber will now give its 70,000 UK drivers a guaranteed minimum wage, holiday pay, and pensions. This development comes after the company lost a legal battle in the UK over drivers’ status. According to this ruling, drivers will now be given the status of a “worker” instead of “self-employed” and will earn the rights of workers. This will continue to let them work flexibly, in a way that they have been, since Uber’s launch in the UK in 2012.

Uber’s chief executive Dara Khosrowshahi told Evening Standard, “This is a significant improvement in the standard of work for UK drivers. But I know many observers won’t pat us on the back for taking this step, which comes after a five-year legal battle. They have a point, though I hope the path that we chose shows our willingness to change.”

Workers’ rights

Uber has confirmed that all drivers in the UK will earn at least the National Living Wage, which is £8.72 (approx €10.18) an hour and rises to £8.91 (approx €10.40) next month. According to the company, starting Wednesday, “more than 70,000 drivers in the UK will be treated as workers, earning at least the National Living Wage when driving with Uber; this is a floor and not a ceiling, with drivers able to earn more, as they usually do. They will also be paid for holiday time and all those eligible will be automatically enrolled into a pension plan.”

The company says: 

• At least the minimum wage (called the National Living Wage) after accepting a trip request and after expenses. On average, drivers earn £17 per hour in London and £14 in the rest of the UK on the same basis when driving on Uber
• All drivers will be paid holiday time based on 12.07 per cent of their earnings, paid out on a fortnightly basis
• Drivers will automatically be enrolled into a pension plan with contributions from Uber alongside driver contributions, setting drivers up over the long term
• Continued free insurance in case of sickness or injury as well as parental payments, which have been in place for all drivers since 2018
• Continued support from Uber’s Clean Air Plan in London, which has so far raised over £120M (approx €140.1M) for drivers switching to an electric vehicle
• All drivers will retain the freedom to choose if, when, and where they drive

Jamie Heywood, Regional General Manager for Northern and Eastern Europe, Uber says, “This is an important day for drivers in the UK. Uber drivers will receive an earnings guarantee, holiday pay, and a pension, and will retain the flexibility they currently value.”

He further adds, “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. We have informed all drivers in the UK of these new rights and protections.”

These benefits will definitely give the drivers better security as well as help them to plan for their futures while maintaining the flexibility that is integral to the private hire industry.

The unions on Uber’s move 

In a tweet, Frances O’Grady, general secretary of the British Trades Union Congress (TUC), says, “This appears to be a big step in the right direction from Uber – but we will read the small print carefully. Gig economy workers deserve dignity at work and the same basic rights as everyone else. Now Uber must recognise a union. We’re happy to host talks to get this started.”

GMB, the union for Uber drivers, says, “It’s taken half a decade to get here. But from today Uber drivers are workers.” It says that the “company has finally done the right thing after losing four court battles.”

Mick Rix, GMB National Officer, says: “Uber had to be dragged kicking and screaming to do the right thing, but finally they’ve agreed to follow the ruling of the courts and treat their drivers as workers. It’s a shame it took GMB winning four court battles to make them see sense, but we got there in the end and ultimately that’s a big win for our members. GMB has consistently said we are willing to speak face to face to Uber about its treatment of drivers – our door remains open.”

“Other gig economy companies should take note – this is the end of the road for bogus self employment,” he further adds. 

According to a statement released by the App Drivers & Couriers Union and signed by James Farrar and Yaseen Aslam – the two drivers who sued Uber over the worker status, “While we welcome Uber’s decision to finally commit to paying minimum wage, holiday pay, and pensions we observe that they have arrived at the table with this offer a day late and a dollar short, literally. The Supreme Court ruled that drivers are to be recognised as workers with entitlements to the minimum wage and holiday pay to accrue on working time from a log on to log off whereas Uber is committing only to these entitlements to accrue from the time of trip acceptance to drop off. This means that Uber drivers will be still short-changed to the tune of 40-50 per cent. Also, it is not acceptable for Uber to unilaterally decide the driver expense base in calculating minimum wage. This must be subject to a 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.”