A smartphone showcasing the Uber app in London.
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On the heels of the loss of a major labor struggle in the UK, Uber will reclassify all drivers in the UK as workers.
Under the new name, more than 70,000 managers will receive some benefits, including minimum wage, vacation time and pension contributions, but they will not receive full employee benefits.
Uber announced the change in an SEC filing, adding that its UK equity business accounts for 6.4% of all gross mobility bookings in the fourth quarter of 2020.
While the move will increase Uber’s costs in the UK, the company is still aiming for adjusted EBITDA profitability by the end of the year.
Earlier this year, Uber lost a major legal battle in the UK over this issue. The country’s high court confirms the ruling that a group of managers are workers, not independent contractors. While the decision applied to a small group of executives, thousands of others took action against the company.
In an open in The Evening Standard, Uber CEO Dara Khosrowshahi wrote that after the Supreme Court ‘ruling, we could continue to challenge drivers’ rights to any of these protections in court. Instead, we decided to turn the page. “
Khosrowshahi admits: ‘I know many observers will not pat us on the back for taking this step, which comes after a five-year legal battle. They have a point, though I hope the path we have chosen shows our willingness to change. “
Meanwhile, Uber and the gig economy as a whole face global regulatory challenges. Uber has spent millions on the challenges in other regions.
In California, Uber pushed back against the Assembly 5 bill, a Conservative Economy law passed by the state legislature in 2019 that tightened the rules for classifying workers as independent contractors.
After a widespread campaign that cost more than $ 200 million – the most expensive ballot box in the state’s history – Uber and a handful of other gig-economy ventures convinced voters to support a ballot called Proposition 22 , which released Uber and other gig-economy platforms. from the state’s labor legislation.
In turn, gig workers received some benefits without full status. Some of the extra costs to offer benefits have been passed on to customers who ride with them.