UK Uber Drivers Will Now Be Classified as Workers

UK Labor Laws

This week, Uber (UBER) announced that it will classify over 70,000 drivers in the UK as workers, not contractors. As a result, the ride-share company will pay its UK drivers the minimum wage, which is 8.72 pounds (or $12.12). Drivers will also receive vacation pay, access to a pension plan, and other benefits.

UK labor laws are somewhat unique in that there is a middle ground between freelancers and full time employees. Uber drivers will be designated as “workers” and will receive the benefits which accompany this distinction. But they will not legally be “employees” therefore they will not receive maternity and paternity leave or severance pay.

Legal Battles at Home and Abroad

These changes come after Uber lost an appeal with the British Supreme Court last month. The court ruled that Uber drivers are not independent contractors and are entitled to protections.

Uber has faced a number of similar legal battles around the world. Until now, the company has fought off regulations. For example, Uber won a case last November surrounding the question of whether drivers should be treated as employees in its home state of California.

Down the Road for Uber

Uber has argued that it is a tech platform used for connecting passengers and drivers, not an employer. Now it must alter its business model in the UK, and it could also have to make changes in other countries soon.

Lawmakers in the US and the European Union are considering implementing more protections for gig-economy workers like Uber drivers, which would affect Uber’s balance sheets. In 2020, Uber reported net losses of $6.8 billion. But demand for travel and transportation is beginning to climb again, so Uber may be able to regain strength and share some of its success with its drivers.

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