Uber has announced that its UK drivers, totaling a 70,000-strong workforce, will be guaranteed a minimum wage, holiday pay and pension. However, this could introduce price hikes for end-users in the country.
The National Living Wage is currently £8.72 an hour, which will drive up costs for Uber and many expect this to be reflected in additional ride charges. Despite this, Uber ensures that this will not be the case, stating that this moment is a “turning the page” for its business. The company is still working out whether it will pay minimum wage when the driver does not have a passenger or only when a ride has been confirmed.
Over in California, where Uber experienced a similar ruling, customers have experienced a price hike.
This follows developments last month when the ride-hailing giant was ordered by the UK’s Supreme Court to classify its drivers as workers, rather than operating as self-employed.
Lead by two former Uber drivers, Yaseen Aslam and James Farrar, tens of thousands of Uber drivers will now be entitled to minimum wage and holiday pay, introducing a large compensation bill to the Californian-based company.
Aslam and Farrar argued that by classing drivers as contractors, Uber is denying basic rights, despite stating that many drivers enjoy operating as freelance.
This decision will set a precedent for how gig workers are treated in the UK and significantly alter the structure of mobility services like Uber, which have operated freely in recent years, despite clashes with governments, transport authorities and workers unions.