Uber re-classifies 70,000 UK drivers as workers in major gig economy shift

Uber Technologies Inc (NYSE:UBER) has re-classified 70,000 of its UK drivers as workers in a move that is likely to cause ripples across the British gig economy. The ride-hailing app said on Tuesday that its drivers, although interestingly not those working for its Uber Eats takeaway delivery service, will also be contacted for settlement offers to make up for lost pay. READ: Uber Technologies hit as UK says drivers are workers Uber’s move also means that the drivers will now be entitled to legal rights conferred to UK workers including minimum wage, holiday pay and a pension. The decision also follows a UK Supreme Court ruling in February that said drivers should be classed as workers rather than self-employed contractors, a designation that does entitle them to certain legal rights reserved for full employees, putting an end to a four-year-long legal dispute. The new conditions, which take effect immediately, are likely to be seen as a victory for gig economy workers across the UK, many of whom are locked in their own disputes with employers over their entitlement to basic labour rights. However, Uber may try to undermine the ruling by entering another dispute on what constitutes ‘working time’ for its drivers, which thus affects the amount of pay each with receive. “It has become clear that the Supreme court’s decision last month steered Uber into a dead end in its fight to keep those behind the wheel on self-employed contracts. It is likely that other operators will now be forced to reassess the employment status of the drivers they have relied on to develop lucrative businesses”, said Susannah Streeter at Hargreaves Lansdown. “Throwing in the towel is likely to come at a significant cost to the company. Drivers will not only be enrolled in a pension plan with contributions paid by the company but they will also be paid the national living wage as a minimum and receive holiday pay…Its employment policy u-turn may prove to be a set back on its ambitious road map, but it might accelerate Uber’s plans to bring in autonomous cars to minimise the increasing cost of human labour”, she added. Shares in Uber were down 2.3% at US$57.49 in pre-market trading in New York on Wednesday.