Uber is reclassifying its 70,000 UK drivers after the UK Supreme Court upheld a decision last month that they should be listed as employees rather than independent contractors.
The company announced on Tuesday that drivers would be entitled to minimum wage, sick time, and a pension as “staff” — a classification special to employment law in the UK that falls short of “employee.” Only ridehail drivers were affected by the changes, not Uber Eats food delivery staff.
Uber (UBER) stated that the minimum wage would be based on engaged time after a trip is approved and after expenditures — a specification that can be challenged. The court ruled last month that drivers are operating from the moment they open Uber’s app, rather than only when they transport passengers, as the company claimed.
“Following the UK Supreme Court’s decision last month, we may have tried to challenge drivers’ rights to either of these freedoms in court. Instead, we’ve decided to turn the page,” wrote Uber CEO Dara Khosrowshahi in an op-ed published Tuesday by the Evening Standard about the changes. “We have been lobbying for policy reforms in both the United States and the European Union to ensure benefits and protection for independent employees without undermining the flexibility that makes this type of job so appealing in the first place,” added Khosrowshahi.
Following a resounding victory in its home state of California, where voters approved a ballot measure in November last year, exempting Uber and other gig economy firms from a state law that would have forced them to reclassify their drivers and delivery people as workers rather than independent contractors, the company has changed its business model in the United Kingdom.
Uber continues to regard its drivers as independent contractors under the ballot initiative, with some new compensation compromises, such as a guaranteed earnings guarantee based on “engaged time” while a driver is performing a ride or delivery order, but not on time spent waiting for a gig. Uber and other gig economy companies have stated that they plan to lobby for similar legislation in other states, as well as federal legislation in the United States, to further solidify their position.
