After a five-year legal battle to continue treating drivers as independent contractors in the United Kingdom, Uber CEO Dara Khosrowshahi wants you to believe that he is throwing in the towel.
“Our thinking on this issue has evolved over time,” wrote CEO Dara Khosrowshahi in a Wednesday op-ed for the UK’s Evening Standard. One factor that likely changed Uber’s thinking: a February ruling by the UK Supreme Court holding that drivers can’t be treated as independent contractors.
Uber says it will now guarantee that all drivers are paid at least the national living wage, which is currently £8.91 ($12.40) for those over 23. And they’ll get that rate after accounting for expenses. Uber says that 99 percent of Uber drivers already earn more than this minimum. And Uber says that’s just a floor; Uber drivers will have the opportunity to earn more if they have a busy day, just as they do today. Uber drivers will also get holiday pay and many will be eligible to participate in a pension plan.
However, Uber’s concession comes with a huge asterisk: an Uber spokesman tells Ars that a driver would only get a guaranteed minimum “for the period between when a driver accepts a trip (including the time spent driving to a passenger) and when they complete the trip.” Uber drivers spend a significant amount of time waiting in their cars between fares. This time would be uncompensated by Uber and wouldn’t be counted toward the minimum. That means some drivers could earn significantly less than the minimum wage for the total time they are behind the wheel.
Uber doesn’t want to pay drivers for waiting time
“If drivers were entitled to the minimum wage for all the time they simply had the app open, this would mean set shifts and a drastic cut to the number of drivers who can earn with Uber, at a time when the UK needs more earnings opportunities, not less,” an Uber spokesman told Ars by email. “Drivers have told us this is not what they want and the changes announced yesterday are the only way to ensure these new rights come with flexibility.”
Notably, this is very similar to the position Uber has taken in California. In 2019, the California legislature passed legislation requiring drivers to be treated as employees—which would have meant they got paid the minimum wage for their entire time behind the wheel. But last November, California voters approved an Uber-backed initiative to overturn the legislation. The initiative offered Uber drivers some legal protections but not the full suite of protections they enjoy under California law.
Under the California proposal, California drivers are guaranteed to make 120 percent of California’s minimum wage when they’re actually driving. But drivers get nothing for the time they spend waiting for the next fare.
Some drivers say Uber is still short-changing them
In a Wednesday statement, the UK App Drivers and Couriers Union blasted Uber’s announcement.
“The Supreme Court ruled that drivers are to be recognized as workers with entitlements to the minimum wage and holiday pay to accrue on working time from log on to log off whereas Uber is committing only to these entitlements to accrue from time of trip acceptance to drop off,” the group wrote. “This means that Uber drivers will be still short-changed to the tune of 40-50%.”
So while Khosrowshahi portrayed the decision to recognize drivers as a significant concession, it’s not clear that Uber is actually conceding very much. The Supreme Court ruling meant that Uber was going to have to change how it treated workers. Uber appears to have chosen the narrowest possible interpretation of the Supreme Court ruling and may just be setting itself up for another round of legal battles.
Uber is fighting this battle around the world
One important difference between the US and the UK is that UK law has an extra employment category. In the US, a driver must be either an employee or an independent contractor. In the UK, there’s a third category called “worker.” Workers are entitled to some, but not all, of the benefits that come with being an employee under UK law.
Khosrowshahi lauded the UK approach and called for the US and the EU to update their own labor laws. He argued that the law should provide drivers with minimum benefits while preserving the flexibility of the current Uber model. He argues that this flexibility benefits drivers, since it means that they can decide when and how much they want to work.
Still, the rights that UK law gives to workers are fairly robust—in some ways as strong as the rights US law gives to employees. One of the biggest differences between workers and employees under UK law is that UK employees have protections against unfair dismissal from their job, while UK workers don’t. In this respect, UK workers are similar to US employees. In the US, many employment contracts are “at will,” with employers reserving the right to dismiss employees at any time.