Uber agrees to pay drivers national minimum wage and pensions

Taxi hailing app Uber has confirmed that all its 70,000 UK drivers will be paid the national minimum wage with immediate effect

Drivers will also be eligible for auto enrolment pensions and holiday pay. This follows the decision of the Supreme Court that Uber drivers should be treated as workers.

In a statement, Uber said that effective 17 March 2021, ‘private-hire drivers using its Mobility platform in the United Kingdom will be treated as workers. A worker is a classification that is unique under UK employment law. Workers are not employees (and remain self-employed for tax purposes) but are entitled to the minimum wage, holiday pay, and, if eligible, a pension’.

The national minimum wage rate will be paid for actual rides, not for waiting times. 

Uber claimed that an estimated 99% of UK drivers earn more than the national living wage. On average, drivers earn approximately £17 per hour of engaged time in London and £14 per hour of engaged time in the rest of the UK, after expenses.

Going forward, all drivers in the UK will be paid holiday time based on 12.07% of their earnings, paid out every two weeks. Eligible drivers in the UK also will automatically be enrolled into an auto-enrolment pension plan with contributions from Uber. These contributions will represent approximately 3% of a driver’s earnings.

Uber’s UK business represented about 6.4% of global bookings in Q4 2020.

The decision to change its relationship with drivers, treating them as workers, will have ramifications for the wider gig economy. Uber Eats drivers are not affected by the changes.

The GMB union welcomed the announcement after supporting Uber drivers in the long-running court case.

Mick Rix, GMB national officer, said: ‘Uber has finally agreed to follow the ruling of the courts and treat their drivers as workers.

‘It’s a shame it took GMB winning four court battles to make them see sense, but we got there in the end and ultimately that’s a big win for our members.

‘Other gig economy companies should take note - this is the end of the road for bogus self-employment.’

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