This is a sea change and a world first for Uber, whose drivers until now have been self-employed.
Uber will grant its British drivers the status of salaried workers, with minimum wage and paid vacation, a world first for the American company and a disruption of the model of digital platforms in the United Kingdom.
The American car reservation giant announced in a press release on Tuesday that all of its more than 70,000 drivers in the country will benefit from these advantages as of Wednesday. This is a sea change for Uber, whose drivers have until now been self-employed. The platform acted quickly after launching a wide consultation with its drivers and just one month after a resounding defeat in the Supreme Court.
Britain’s highest court ruled on February 19 that drivers could be considered “workers” and therefore benefit from social rights. Justice ruled in favor of a group of twenty drivers who felt they were entitled to worker status, given the time spent connected to the application and the control exercised by the group, for example on their evaluation. British law distinguishes the status of workers, who can receive the minimum wage and other benefits, from that of employees in the strict sense (employees), who benefit from a formal employment contract. . Now Uber drivers in the UK will be paid at least minimum wage, will be entitled to paid time off and will be able to contribute to a retirement savings plan, to which the company will contribute. The UK minimum wage is 8.72 pounds an hour, and is set to rise to 8.91 pounds in April. An Uber driver earns more than that on average – £ 17 in London and £ 14 in the rest of the country.
“An important day for the drivers”
Uber explains that all of its drivers wanted to be able to benefit from these advantages, while maintaining flexibility in their working conditions. They will always have the option to work with Uber whenever they want. These advantages are in addition to those already existing, such as free access to health insurance, as well as compensation for parental leave. “It’s an important day for drivers in the UK”, assures Jamie Heywood, Uber boss for Northern and Eastern Europe. “Uber is only part of the car reservations business and we hope other operators will join us in improving the working conditions of these workers who are essential in our everyday lives”, according to him.
Uber does not disclose the cost of these measures, which should be significant and weigh a little more on the fragile finances of a company not yet profitable and in a bad way with health restrictions. The group should absorb part of the cost because it can hardly increase its prices, especially in London where competition is fierce. But by granting the status of salaried workers, the company avoids lengthy legal proceedings. Because the decision of the Supreme Court could have allowed the drivers to turn to justice to obtain the rights that Uber has just granted them.
Negotiations with Europe
Uber is only making this move for the moment in the UK and will now look market by market at how it can evolve its model. Managing Director Dara Khosrowshahi made a series of proposals to governments and unions in Europe in February. The objective is to guarantee transparent and fair remuneration to drivers and to offer them more advantages. Uber plans to be able to replicate in Europe what it has proposed in California, namely independent drivers but who receive compensation. In France, drivers are self-employed, even if in 2020 the Court of Cassation recognized a former driver as an employee.
It remains to be seen whether the announcement of Uber could have consequences on other digital platforms in the United Kingdom which are the symbols of the gig economy (economy of “odd jobs”), or precarious and low-paid jobs. The deliverers of Deliveroo, a food delivery application, are awaiting the decision of the London Court of Appeal to find out whether they can benefit from a collective agreement in order to have better working conditions. In Spain, the government has taken the lead by announcing on Thursday an amendment to its Labor Code which now automatically considers home deliverers of all platforms as salaried employees.