Uber on Tuesday said it is granting its UK drivers worker status, with benefits including a minimum wage — a world first for the US ride-hailing giant. Weeks after a top court ruling that could shake up Britain’s wider “gig economy” of 5.5 million people, Uber said its drivers would also get holiday pay and a pension.
It is a massive change in the business model of a company that had argued before Britain’s Supreme Court that its drivers were self-employed. From 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,” the taxi app said in a statement. “This is a floor and not a ceiling, with drivers able to earn more.” The court ruled last month that Uber’s drivers are entitled to worker’s rights. The decision capped a protracted legal battle between UK drivers and the Silicon Valley taxi and delivery company. Uber said its action over workers’ rights “means drivers will earn with greater security, helping them to plan for their futures while maintaining the flexibility that is integral to the private-hire industry.”
The higher costs for Uber come as it faces sliding driver bookings owing to the Covid-19 pandemic, despite strong demand for the Uber Eats food delivery service during national lockdowns.