Uber under pressure on UK minimum wage in test of gig economy

Uber reclassified its more than 70,000 drivers in Britain as workers, meaning they are guaranteed entitlements such as holiday pay

By Costas Pitas

LONDON (Reuters) - Uber drivers in Britain should receive the minimum wage for the whole time they are logged on to the app, two former drivers said on Wednesday after winning a court battle which could reshape the gig economy.

Following a UK Supreme Court defeat last month, the Silicon Valley-based company reclassified its more than 70,000 drivers in Britain as workers, meaning they are guaranteed entitlements such as holiday pay.

On the minimum wage, which stands at 8.72 pounds ($12.13) per hour for those aged 25 and over, Uber said it would apply "after accepting a trip request and after expenses" and that on average drivers earn an hourly 17 pounds in London.

Drivers will not receive it during the time they spend waiting for a passenger request, which can account for as much as a third of the time drivers are behind the wheel with the app turned on, according to several U.S. studies.

James Farrar and Yaseen Aslam, the two lead drivers in a 2016 employment tribunal case that Uber unsuccessfully contested all the way to Britain's top court, criticised the move.

"Uber drivers will be still short-changed to the tune of 40-50%," they said in a statement released by the App Drivers & Couriers Union.

"Also, it is not acceptable for Uber to unilaterally decide the driver expense base in calculating minimum wage."

GIG ECONOMY SHAKE-UP?

Uber said it has consulted with thousands of drivers over the last few weeks who do not want to lose the flexibility they enjoy, with the ability to choose "if, when and where they drive."

Workers are entitled to fewer rights than those classed as employees, who are also receive sick pay and parental leave. Uber in California last year pushed and won a similar compromise on drivers' status.

Uber has faced opposition from traditional taxi operators and unions who criticised the app for undercutting existing players, leading to protests and regulatory and legal challenges which have forced the company to pull out of some markets.

France's top court in 2020 recognised the right of an Uber driver to be considered an employee while European Union regulators are considering new rules to protect gig economy workers.

Many cases involving workplace rights have taken years to work their way through the courts as they are subject to appeals.

Drivers in the British litigation were working for Uber during "any period when the driver was logged into the Uber app within the territory in which the driver was licensed to operate and was ready and willing to accept trips," according to a Supreme Court press summary.

Farrar suggested there may be more legal action over the issue. Uber has cited in court the risk of drivers logging into multiple apps.

Uber's announcement could also put pressure on other firms operating in the gig economy, where millions of people tend to work for one or more companies on a job-by-job basis.

Rival taxi service Addison Lee and food delivery firm Deliveroo, which is due to float soon, have both been subject to legal action over workplace rights.

"The new phase of our economy should be about protecting workers' rights, driving higher standards, driving new technologies," business minister Kwasi Kwarteng told Sky News.

($1 = 0.7191 pounds)

 

(Reporting by Costas Pitas; editing by James Davey, Louise Heavens and Toby Chopra)