Big news coming from the United Kingdom: Uber has agreed to reclassify 70,000 UK drivers as workers, allowing them access to pension pay, paid vacation, and more while still allowing them to retain flexibility. Senior RSG contributor Paula Gibbins breaks down whether this is a better version of Proposition 22, and what drivers are saying about it.
Last month, the United Kingdom Supreme Court ruled that Uber drivers are currently misclassified as independent contractors, when in reality they should be considered employees, or rather “workers”.
Instead of threatening to leave the UK or offering their own deal like Uber did in California, Uber decided to go ahead and change the classification of UK drivers to match the requests of the courts.
Takeaways:
- 70,000 UK drivers will be reclassified as workers, entitling them to minimum wage, vacation pay and benefits
- Drivers will not earn minimum wage until they have accepted a trip, not from when they sign on – much like Prop 22
- Drivers in the UK have the biggest issue with this – they believe only counting at the beginning of a trip (vs logging on) shortchanges drivers
UK Decision: Is This a Groundbreaking Change for Drivers?
Watch our video coverage of the news here: Uber Drivers In The U.K Are Now Classified As Workers And Will Receive Benefits!
Some consider this change of classification to be “groundbreaking” while others find that the end result isn’t all that different from the Prop 22 change that Uber made in California.
The reclassification will affect 70,000 UK drivers by entitling them to a minimum wage, vacation pay and pensions. However, not all is set in stone yet. It’s believed there will be further legal battles over the minimum wage and when a driver is eligible to receive this pay.
Much like Prop 22, Uber is maintaining that UK drivers will not start earning minimum wage until they have accepted a trip, not from the moment they sign into the app.
As for holiday (vacation) pay, drivers will be paid holiday time based on 12.07% of their earnings, paid out on a biweekly basis.
How The UK Ruling is Different from Prop 22
One reason some people think this move is not as big of a deal is because it closely resembles the changes put in place in California with the passing of Prop 22, but also because the UK classifies its workers differently than the United States does.
The UK has three different options for workers outlined in their labor laws that other countries do not. In the UK you can be a freelancer/contractor, a full-time employee, or something in between the two, which is where Uber is moving its driver classification to. They are changing the classification to that middle sweet spot.
Possibly the biggest upside is that Uber is promising UK drivers will retain their flexibility, which is something we know drivers crave more than most other perks associated with driving for Uber.
That, paired with a pension plan, which is unheard of in the gig economy business as of yet. The amount of money distributed into a pension plan was not outlined, but this is what the announcement states, “Drivers will automatically be enrolled into a pension plan with contributions from Uber alongside driver contributions, setting drivers up over the long term.”
The terms are still in the works, but Uber said they will ensure that all eligible drivers who do not opt out of the pension plan will receive the appropriate contributions from the start date of March 17, 2021 once it officially rolls out.
Jamie Heywood, Regional General Manager for Northern and Eastern Europe with Uber said:
“This is an important day for drivers in the UK. Uber drivers will receive an earnings guarantee, holiday pay and a pension, and will retain the flexibility they currently value. Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives.”
UK Reaction to the News
James Farrar and Yaseen Aslam, of Worker Info Exchange, a nonprofit for dedicated to gig workers’ rights, had this to say about the news:
Our statement on Uber pay offer pic.twitter.com/07r90EkfHz
— James Farrar (@jamesfarrar) March 16, 2021
Basically, they believe drivers should be recognized as workers that accrue working time from log on to log off, whereas Uber is only allowing working time to be accounted for when a trip is accepted to drop off. They believe drivers are being short-changed 40-50%.
Comments from those following James Farrar on Twitter mostly supported the comments from Worker Info Exchange, but many drivers appeared skeptical that Uber would heed the suggestions. UK drivers, like many US drivers, seem to have little faith that Uber will do the more driver-friendly thing and allow drivers to have greater say in their pay, flexibility and more.
Reactions to the News
When we shared the news on our social media outlets, we received varied responses.
On Twitter, one commenter stated, “Perhaps at the end of the day this threat to pull out of markets has been revealed for what it was … a total sham. I also think that it’s the first of many dominos to fall. Governments are getting sick of their dodgy behavior. Comply with the regs or get out. Uber blinked.”
A professional on LinkedIn said, “This is pretty groundbreaking not just for Uber, and the ridesharing industry, but the future of work as a whole.”
As for me, I am surprised they made the move so quickly and with such little fuss, but I am not under the impression this will be easily replicated.
However, it does seem like Uber has showed their hand. They are actively proving that they are able to provide what’s necessary as required by labor laws while also maintaining worker flexibility.
Granted, it is also not lost on me that the UK already has a “happy middle ground” built into their labor laws, which is vastly different from federal labor laws as they currently stand in the United States.
One thing is absolutely certain: the fight against worker misclassification is far from over. Showing this kind of leeway, Uber may be opening a can of worms they can’t close again.
Readers, what do you think about this news? Do you think there should be a new classification system for US drivers, where they get better pay but still retain flexibility? Would Prop 22 be the answer?
-Paula @ RSG
