Uber, a US-based taxi-hailing app, will now be required to give its drivers a minimum wage, vacation pay and other fringe benefits to its drivers in the United Kingdom
This follows a U.K. Supreme Court ruling, made last month, that unanimously rejected Uber’s arguments that the drivers merely going gigs and were not workers.
All 70,000 U.K. Uber drivers will be entitled to a minimum wage, holiday pay and other benefits.
The San Francisco based ride-hailing app’s drivers will receive at least the national living wage of US$12.11 per hour.
a ceiling.”
Uber business model
The U.K. is the first country in the world where Uber will have this business model.
The firm has not mentioned much the reclassification will cost but said it doesn’t expect to change its earnings forecast for the quarter of the year. Uber shares declined less than 1% in this information hit the markets.
These changes are confined to the U.K., which is Uber’s biggest European market.
The U.S. firm is looking at legal hurdles in California’s home state and pressure from European policymakers to improve conditions for gig-economy workers.
The minimum wage will happen after a client accepts trip requests made on the taxi-hailing application. Drivers will be paid based on 12.07% of their earnings after every two weeks.
The workers will also have a pension plan, with the contributing 3% of a driver’s earnings to the scheme. This is in addition to a medical insurance scheme covering sickness, injury and parental leave that has been available since 2018.
The company’s added costs will thus be made of holiday and pension contributions. Its U.K. driving business represented about 6.4% of its global mobility gross bookings in the fourth quarter.
Besides, the firm says it will set up a process for drivers to seek compensation for back-dated holiday pay and lost earnings, without the need to go through the employment tribunal where the case started.
The firm has been lobbying for a separate labour classification with limited benefits in the U.S.
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