A smartphone showing the Uber app in London.
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After losing a major labor battle in the UK, Uber will reclassify all UK drivers as workers.
Under the new designation, more than 70,000 drivers will receive some benefits, including the minimum wage, vacation time and pension contributions, but will not get full benefits from employees.
Uber announced the change in an SEC filing, adding that its UK shared travel business accounted for 6.4% of all gross mobility bookings during the fourth quarter of 2020.
While the measure will increase Uber’s costs in the UK, the company continues to focus on adjusted EBITDA profitability at the end of the year.
Earlier this year, Uber lost a major legal battle in the UK over this issue. The country’s Supreme Court upheld the ruling that a group of drivers were workers and not independent contractors. Although the decision applied to a small group of drivers, thousands more have taken action against the company.
In a post published in The Evening Standard, Uber CEO Dara Khosrowshahi wrote that, following the Supreme Court ruling, “we could have continued to discuss drivers’ rights over any of these protections in court. , we have decided to turn the page. “
Khosrowshahi admits: “I know many observers will not hit us in the back for taking this step, which comes after a five-year legal battle. They have a point, although I hope the path we have chosen shows our willingness to change “. “
Meanwhile, Uber and the concert economy as a whole are facing regulatory challenges around the world. Uber has spent millions fighting these challenges in other regions.
In California, Uber backtracked on Assembly Bill 5, a concerted economy law passed by the state legislature in 2019 that tightened the rules for classifying workers as independent contractors.
After a widespread campaign, which cost more than $ 200 million – the most expensive voting measure in the state’s history – Uber and a handful of other concerted economics companies convinced voters to give support for a voting measure called Proposition 22, which exempted Uber and other state labor law enforcement platforms.
In turn, concert workers received some benefits without the full employment situation. Some of the additional costs of providing benefits were passed on to customers who share vehicles.