Uber announces new rights for its drivers in a move which could have big implications for the gig economy.
Uber has announced that it will give its 70,000 UK drivers a guaranteed minimum wage, holiday pay and pensions following a court case – a move that will have widespread implications for gig workers.
The ride-hailing app firm’s decision came after it lost a Supreme Court case over drivers’ employment status which found that they should be treated as workers rather than independent contractors.
Uber says drivers will earn at least the UK’s National Living Wage and that the new rates would come alongside free insurance to cover sickness, injury and maternity and paternity payments which have been in place for all drivers since 2018. Staff will also see holiday pay equivalent to 12.07% of their earnings and be entitled to automatic enrolment in a workplace pension scheme.
Mick Rix, general secretary of the GMB union, said the move marks “the end of the road for bogus self-employment” and urged other gig economy companies to take note.
TUC general secretary Frances O’Grady said: “Gig economy workers deserve the same basic rights as everybody else.”
However, the App Drivers & Couriers Union said many staff would be short-changed as the deal only covered drivers when they had bookings.
Rebecca Thornley-Gibson, partner at DMH Stallard, said: “Uber’s announcement that from today they will be paying drivers in the UK the National Living Wage, pension contributions and holiday pay should not be a surprise.
“Following last month’s Supreme Court ruling that their drivers are workers and entitled to these remuneration components, Uber were left with no choice but to meet their legal obligations.
“What Uber have not yet announced is how they will deal with past failures to make these payments and when drivers will receive these monies. As that will be a significant cost to Uber and involve complex calculations, those fighting on behalf on the drivers will continue to be involved in discussions that should result in settling historic underpayments.”
She added: “The gig economy continues to face challenges on how to treat individuals who earn their living from it.
“Non traditional working structures do not always result in an abdication of employment rights and it is likely we’ll see further extension of employment rights to more individuals, as the ’employee/worker/self employed’ status issues continue to be brought to the courts for determination.”
Matthew Taylor, author of a government-commissioned report into the gig economy, gave Uber’s move a cautious welcome, but said it is vital the government legislates to clarify the grey area of employment status for gig workers at all companies, from Deliveroo to Amazon. And he noted that the question remains about whether workers should be on the minimum wage as soon as they sign up for work on the app, not just when a trip is accepted.
Meanwhile, a YouGov survey for jobs site Indeed has found that furloughed workers are more likely to have reported worsening mental health since the start of coronavirus restrictions.
While 44% of all employees said their mental health was worse now than a year ago, the share rose to 51% for those who have been furloughed – with two in five of those believing that returning to work will improve their mental health.