Uber to pay drivers minimum wage, holiday pay and pensions after UK court ruling

In a move that could have repercussions around the world, Uber says it will give its UK drivers a guaranteed minimum wage, holiday pay and pensions.

The global ride-hailing app giant said drivers would earn at least the UK’s National Living Wage for over 25s, of £8.72 (US$12.12, RM49.88) an hour.

The announcement comes one month after the US firm lost a five-year legal battle in the UK over drivers’ status.

Uber told the BBC it did not expect the change in drivers’ conditions to mean higher fares.

In last month’s Supreme Court hearing, Uber had argued it was a third-party booking agent, and its drivers were self-employed, but the court ruled its drivers were workers.

A worker is a classification that is unique under UK employment law. Workers are not full employees but are entitled to the minimum wage, holiday pay and a pension.

The company is being challenged by its drivers in multiple countries over whether they should be classed as workers or self-employed.

Uber said the changes to its UK drivers’ pay would come in almost instantly, from Wednesday, and form an earnings floor, not an earnings ceiling.

The company, which says it has 70,000 drivers in the UK, said the new rates would come on top of free insurance to cover sickness, injury and maternity and paternity payments which have been in place for all drivers since 2018.

All drivers will retain the freedom to choose if, when and where they drive.

The company said the recent UK Supreme Court ruling had provided a clearer path forward to a model that gives drivers the rights of worker status while continuing to let them work flexibly.

The former drivers who sued Uber over worker status, welcomed Monday’s announcement, but said the company was still “short changing” drivers.