Weeks after losing a major labor battle in the Supreme Court, Uber has announced that it will treat drivers as workers in the United Kingdom. The ride-hailing app giant announced the change during a filing at Securities and Exchange Commission. The company said in the filing that 6.4 percent of the total mobility gross bookings it received during the fourth quarter of 2020 are from the UK. After these changes, Uber drivers will get some assured benefits like minimum wage, paid holiday, and pension contributions from the employer. This also means that Uber will pay its drivers, who are over the age of 25, in UK National Living Wage. The minimum wage to be paid in the UK is around £8.72 per hour.
The move will increase the company’s costs in the United Kingdom. However, Uber hopes adjusted EBITDA profitability by the end of the year. The company has also said that the changes will not mean an increase in fares for passengers. In an op-ed in a newspaper, Uber chief executive officer Dara Khosrowshahi said that could have continued the battle but the company decided to turn the page. “I know we will not get a pat on the back for this move, which comes after a long-fought legal battle. They have a point. But I think the path chosen by us shows our willingness to change.”
Earlier this year, the ride-hailing service provider lost a major legal battle over the issue. The top court upheld the ruling that stated that a group of drivers were not independent contractors but workers. While the ruling was applicable to a small group of Uber drivers, thousands of others have taken the matter against the company. Meanwhile, Uber and the gig economy are facing challenges from regulatory authorities from around the globe. The company has already spent millions on fighting those challenges in other regions. Uber has always maintained the position that it is a technology platform and charges a fee for connecting drivers with passengers.
