Uber, the global ride-hailing giant, has said that it would give its U.K. drivers a minimum wage as well as holiday pay and would contribute to their pension. This announcement comes after Uber lost its legal battle in the U.K. This move could bring a few much needed changes in the gig economy.
In February, Uber lost in its third and crucial stage of its five-year battle and conceded that it had to make changes in the U.K. The company’s CEO Dara Khosrowshahi said that it showed “willingness to change.”
Uber had categorized its drivers as self-employed and called itself a third-party booking agent. However, the Supreme Court ruled that its drivers were workers. This means that they are entitled to minimum legal wage, pension rights and holiday pay. Drivers in other countries around the world are also challenging the “self-employed” classification.
The ride-hailing app said that changes in pay would come in effect from Wednesday. This would be in addition to the free insurance that had come in effect for drivers in 2018. It also said that consumers would not face a raise in fares.
Some union leaders and the former drivers who sued the company say that not enough has been done and the drivers are not getting all the entitlements due as workers.
However, employment experts and unions have applauded the announcement as a first step forward towards worker’s rights and feel that it could reverberate through the gig economy.
Uber’s rival Bolt told the BBC that it did not intend to change its policies as drivers are already earning much more when compared with other ride-hailing apps as Bolt charges lower commission.
Union reps have been portraying the win as a “David versus Goliath” battle. They hope this victory would have a domino effect and other giant gig economy companies would follow suit and improve worker’s conditions.