Uber will pay its 70,000 UK drivers minimum wage and benefits following major court defeat
- Uber is reclassifying its UK-based drivers as "workers," it said in a regulatory filing Tuesday.
- The move requires Uber to follow minimum wage, paid vacation, and other labour laws.
- Uber strongly opposes efforts to reclassify its drivers, but pivoted in the UK after a legal defeat.
- For more articles, go to www.BusinessInsider.co.za.
Uber announced Tuesday it will reclassify drivers in the United Kingdom as "workers," guaranteeing them minimum wage, paid vacation, pensions, and additional protection under the country's labour laws.
In a statement, Uber told Insider the move will impact more than 70,000 drivers, and follows a recent unanimous Supreme Court decision that determined drivers should be classified as workers.
Uber initially downplayed the ruling, saying it "focussed on a small number of drivers who used the Uber app in 2016," though shares of Uber dropped as much as 2% following the ruling.
With Tuesday's announcement, Uber has opted to reclassify all UK drivers rather than fight legal battles with individual drivers about whether the court's ruling would apply to them.
In South Africa, Uber is facing a similar class action suit from some of its drivers, who are currently self-employed independent contractors and have limited rights.
A team of local lawyers, supported by a London firm which recently won the landmark case against Uber in the UK, are currently preparing a case to have Uber drivers be identified as employees and afforded rights through the Labour Relations Act and the Basic Conditions of Employment Act.
"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," Jamie Heywood, the regional general manager for Northern and Eastern Europe, told Insider in a statement.
The move is a major shift for Uber, which has aggressively fought rulings by courts and regulators in the US that have determined drivers to be employees as opposed to contractors. In California, Uber spent at least $30 million persuading voters to pass Proposition 22, a law it co-authored that carved out an exemption from state labour laws to allow rideshare and food delivery drivers to be treated as contractors.
Unlike American law, which defines workers as employees or contractors, UK law has an additional "worker" category, which entitles workers to receive the minimum wage, paid vacation, rest breaks, and protections against illegal discrimination, retaliation for whistleblowing, and wage theft. That classification falls short of guaranteeing benefits like parental leave and severance to which full employees are entitled.
Uber said the UK minimum wage, which is slightly above $12, will serve as an "earnings floor, not an earnings ceiling" after accounting for roughly 62 cents in per-mile expenses, but that drivers won't be paid for the time they spend waiting for a ride - which some researchers have found accounts for as much as 33% of drivers' work.
Uber also said it will pay drivers around 12% of their earnings as vacation pay every two weeks and enroll them in a pension plan to which Uber will also contribute.
Labor advocates voiced their support for the move and the court ruling that proceeded it.
"Dear America ...u see what happens when a government lays it down? Is Uber leaving? No, they're actually doing right by their workforce in the UK. Our drivers deserve this too. Why would an American company short change American workers? Because we let them!" tweeted California Assemblywoman Lorena Gonzalez, the author of AB-5, the state labour law that Uber sought an exemption from by pushing Prop 22.
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