The ride hailing company Uber has said that it will guarantee a minimum wage, holiday pay and pensions for its 70,000 drivers in the United Kingdom, but also assured customers that it will not result in a rise in fares.
In a move that analysts said could be have wide ranging implications for the wider gig economy, Uber drivers would earn at least the National Living Wage, or £8.72 an hour, said the ride hailing giant.
It was a month ago, a UK court had ruled in favour of Uber drivers over their status as employees and not contractors as the company identifies them.
The move was described as “turning the page” on workers’ rights by Uberm the company said but added that it had not gone far enough.
But after a similar ruling, the company had increased prices in California, asnalysts also warned, and predicted it would do the same in the UK.
“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,” said Uber’s chief executive Dara Khosrowshahi writing in the Evening Standard.
There can be far reaching consequences for the gig economy because of the move of Uber, said UK union leaders and employment experts.
The move of Uber was described as “a very significant milestone” by Bates Wells lawyer Rachel Mathieson, who represented Uber drivers fighting for worker rights.
However there was still a complaint made by one union and alleged that the company will still not be paying its drivers for the time they spent waiting in between jobs.
Couriers in its food delivery business, Uber Eats, who remain self-employed, will not be included in the changes.
In February, Uber lost the third and final stage of a five-year legal battle with drivers who claimed it had wrongly classified their employment status. The company argued that it was a third-party booking agent, and its drivers were self-employed.
But when the case reached the Supreme Court, the company’s drivers were classified as employees, which meant that they were legally entitled to receive a minimum wage, paid holidays and pension rights.
Even though there was no binding ruling on Uber to implement the ruling throughout the company, the company did so potentially because it was facing more action from other drivers as well as calls for compensation for past missed entitlements.
The changes to its UK drivers’ pay would come in from Wednesday and one should consider them to be an earnings floor and not an earnings ceiling, said Uber which is currently worth $110bn but has never made an annual profit.
(Adapted from BBC.com)