LONDON – Over the years, Uber has successfully deployed armies of lawyers and lobbyists around the world to attempt to reorganize drivers as company employees entitled to higher salaries and benefits rather than low-cost, self-employed freelancers .
Now the ride-hailing giant is retreating from that hard-line stance in Britain, one of its most important markets, following a major legal defeat.
On Tuesday, Uber said it would reclassify more than 70,000 drivers in the UK who would get workers minimum wage, paid leave and access to the pension scheme. The decision, Uber said, is the first time the company has agreed to classify its drivers in this way, and it comes in response to Landmark British Supreme Court’s decision last month Said that Uber drivers were entitled to more security.
The decision represents a change for Uber, although the move was made easier by British labor regulations that provide a middle ground between freelancers and full staff that does not exist in other countries. That middle ground does not make it clear whether Uber will change its stand elsewhere. More labor battles are coming up in the European Union, where policy-makers are considering the tougher labor regulations of gig-economy companies, as well as United States of america.
The fragile business model of Uber and other so-called gig economy companies relies on keeping labor costs low, using a vast network of workers defined as independent contractors. Although services have changed the way people move and order, and billions of dollars have been valued by investors, they still struggle to make a profit. In 2020, Uber reported a net loss of $ 6.8 billion.
Uber rejected previous labor regulations by saying that it only serves as a technology platform that connects drivers and passengers. But UK Supreme Court justices unanimously ruled that Uber behaved like an employer, setting rates, handing over rides and requiring drivers to follow certain traffic routes.
The court’s decision was appeased by labor activists who have spent years criticizing how companies such as Uber, Lyft, DoorDash and Grube treat drivers and delivery people.
In Britain, Uber originally demanded the Supreme Court’s decision to be quashed. The company said the decision would only apply to very few drivers in the UK. But the company risked being caught in legal proceedings with individual drivers across the UK regarding the application of the decision.
Uber said that, starting on Wednesday, all drivers in the UK would be defined as “workers”, a legal classification in the country that provides for minimum wage and vacation time to drivers. It does not provide complete protection of the classification which is called absolute “Staff, “Which includes paternity and maternity leave and severance payments, if dismissed, among other benefits.
In a statement, Uber said last month’s court ruling “gives a clear path to a model that gives workers labor status – while they continue to work flexibly, just as they would in the UK” Uber has since its launch. In 2012. “
Uber said that drivers will receive the country’s minimum wage until they accept a ride request until the passenger leaves the place, but wait until they request someone to ride. Uber said drivers can still earn more if the fare exceeds the minimum wage, as it often does. From 1 April, UK minimum wage For those over the age of 25, 8.91 pounds or about $ 12.40 would be.
For vacation, drivers will receive 12 percent of their earnings, paid every two weeks, a. Government-determined calculations.
Uber did not disclose how much the reclassification of British drivers would add to its cost, but it said in a regulatory filing that it did not change the company’s goal to be profitable this year. London is one of Uber’s five largest markets, and accounts for around 6.4 per cent of the company’s gross bookings in the UK.
Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, pressured other ride companies in the UK to adopt similar policies.
“Uber is just one part of a large 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.” He said in the statement.