Uber drivers are to be granted key workplace benefits including a guaranteed minimum wage, holiday pay and pensions from tomorrow following a Supreme Court ruling.
The landmark decision by the ride hailing app means that 70,000 drivers will be treated as “workers” rather than self -employed contractors for the first time.
The Silicon Valley giant said it had decided not to contest the judgment last month, which it had initially insisted legally applied to only a few dozen drivers.
Writing in the Evening Standard Uber’s chief executive Dara Khosrowshahi said: “This is a significant improvement in the standard of work for UK drivers. But I know many observers won’t pat us on the back for taking this step, which comes after a five-year legal battle. They have a point, though I hope the path that we chose shows our willingness to change.”
He added: “The Supreme Court judgment provides a clearer path forward, so that we can build a model that gives drivers the protections of worker status while continuing to let them work flexibly, in the same way they have been since Uber came to the UK in 2012.”
Worker status is unique to UK employment law and confers some but not all of the protection enjoyed by fully fledged employees. Many casual and agency workers fall into this category.
Uber’s decision means that drivers cannot earn less than the National Living Wage – currently £8.72 an hour but going up to £8.91 next month – once they have accepted a ride request. In practice drivers in London currently average around £17 an hour.
They will also automatically get a holiday pay top-up of 12.07 per cent of their earnings every fortnight, equivalent to 28 days of paid holiday a year, the legal minimum entitlement for workers.
The third benefit is automatic enrolment into a pension plan with drivers contributing five per cent and the company three per cent. The contributions will start being paid from tomorrow.
It is the latest in a series of improvements to the working conditions of Uber drivers. They were given free insurance to cover sickness, injury and maternity and paternity payments in 2018.
All drivers will continue to choose what hours they work.
Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, said: “This is an important day for drivers in the UK. Uber drivers will receive an earnings guarantee, holiday pay and a pension, and will retain the flexibility they currently value.
“Uber is just one part of a larger 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.”
Uber has made strenuous efforts to improve its reputation as a “corporate citizen” in London since it was stripped of its licence by Transport for London in September 2017 shortly after Mr Khosrowshahi became its boss.