Uber will classify around 70,000 drivers in the UK as workers and give them some benefits after losing an appeal at the Supreme Court level in February, following a years-long legal battle over their employment status. Drivers will still not be considered full-time employees, but will accrue holiday time and receive a minimum wage while driving fares, and will be enrolled in a pension plan starting on March 17th.
Although the U-turn by Uber is seen as a big win for drivers, there are some notable caveats. Most importantly, drivers will only earn a minimum wage after accepting trip requests, and will not be paid an hourly rate. This potentially goes against the February Supreme Court ruling, which, in a press summary, states that “time spent ... working for Uber was not limited (as Uber argued) to periods when they were actually driving passengers to their destinations, but included any period when the driver was logged into the Uber app.”
The UK ruling in February came just a few months after voters in California approved Prop 22, a ballot measure that reversed a previous decision to classify drivers as employees. And despite repeated claims that classifying drivers as employees would make things more expensive for customers, all the major gig economy companies have since raised prices anyway. Uber, which helped bankroll the effort to pass Prop 22, is now looking at making similar moves in the European Union.
The case Uber lost in February began all the way back in 2016 when two drivers argued that Uber had too much control over their actions to not be considered their employer. Uber lost but continued to appeal all the way up to the UK Supreme Court, which affirmed the lower-court decisions in February.
Uber and companies like it have long argued that classifying drivers too rigidly would make it harder for them to work when they wanted, and that flexibility was just as, if not more, important than benefits and other protections afforded by more official employment status.
In an op-ed published Tuesday in the Evening Standard, Uber CEO Dara Khosrowshahi said it is “increasingly clear to us that flexibility alone is insufficient, and that it should not come at the expense of social protections.” But he added that he believes “outdated employment laws essentially force that trade-off.”
Update, Wednesday March 17th, 05:22AM ET: Story updated with additional detail about how minimum wage will be paid to UK drivers, not as an hourly rate but only after drivers have accepted fares.