A smartphone showcasing the Uber app in London.
Oli Scarff | Getty Images
On the heels of the loss of a major labor battle in the UK, Uber will reclassify all drivers in the UK as workers.
Under the new name, more than 70,000 managers will receive some benefits, including minimum wage, vacation time and pension contributions, but they will not receive full employee benefits.
Uber announced the change in a submission from the Securities and Exchange Commission, adding that its UK business venture accounted for 6.4% of all gross mobility bookings in the fourth quarter of 2020.
Although the move will increase Uber’s costs in the UK, the company is still increasing its adjusted EBITDA profitability by the end of the year.
Earlier this year, Uber lost a major legal battle in the UK over this issue. The country’s high court confirms the ruling that a group of managers are workers, not independent contractors. While the decision applied to a small group of executives, thousands of others took action against the company.
In a remark in The Evening Standard, Uber CEO Dara Khosrowshahi writes that after the Supreme Court ‘ruling’ we could continue to challenge drivers’ rights to any of these protections in court. Instead, we decided to turn the page. “
“I know many observers will not pat us on the back for taking this step, which follows a five-year legal battle,” Khosrowshahi said. “They have a point, although I hope the path we have chosen shows our willingness to change.”
Meanwhile, Uber and the gig economy as a whole are facing regulatory challenges around the world. Uber has spent millions on the challenges in other regions.
In California, Uber backed down on the Assembly 5 bill, a law passed by the state-of-the-art in 2019, which tightened the rules for classifying workers as independent contractors.
After a widespread campaign that cost more than $ 200 million – the most expensive ballot box in the state’s history – Uber and a handful of other gig-economy ventures persuaded voters to support a ballot box company called Proposition 22, which exempted Uber and other gig-economy platforms from state labor laws.
In turn, gig workers received some benefits without full status. Some of the additional costs of providing benefits have been given to customers with a notorious attention.