SAN FRANCISCO– On Tuesday, Uber announced it will grant more than 70,000 U.K-based drivers “WORKER” status, to allow its workforce the minimum wage and benefits. It is marking a major departure for a firm that has built a business model out of operating drivers as self-governing contractors.
This announcement came to light, after a month Britain’s Supreme Court ruled in this capital-specific case that the drivers are “workers”. Now they can log on to the application until they log off, and are entitled to multiple benefits that are being savored by the workers under the minimum wage law. They can savor protections, inclusive holiday pay, and a pension along with a wage floor.
The major question here is why drivers should be treated as workers and not as self-employed. So, here it is, this decision will impact positively thousands of drivers making them more secure at their workplace, and getting all the benefits any normal worker or employee enjoys under the law.
The ruling administration leaves the ride-hailing application facing a massive compensation bill, having wider consequences for the gig economy. But while justifying its act, Uber said the UK government only focused on a small number of drivers and it had since made relevant changes to its business. Since the long-running battle, Uber has finally appealed to the Supreme Court after losing three consecutive rounds. With this ongoing hassle, the share price of Uber dipped, with the US trading began on Friday. Investors got into a dilemma about what impact the London ruling party could have on the company’s business model. Not only this, it is being challenged by its drivers in numerous countries over whether they should be classed as workers or stay self-employed.
Sneak Peek into early facts and statements!
In an employment tribunal in 2016, Former Uber Drivers James Farrar and Yaseen Aslam stated- Uber said its drivers were self-employed and it therefore was not responsible for paying any minimum wage nor holiday pay.
Surprisingly, the twist was the two won an employment tribunal in October 2016, stated by BBC. They were extremely thrilled and relieved by the Giant. They said-
“I think it’s a massive achievement in a way that we were able to stand up against a giant”Mr Aslam, President of the App Drivers and Couriers Union (ADCU).
Later, it was added- “We didn’t give up and we were consistent- no matter what we went through emotionally or physically or financially, we stood our ground. It clearly conveys the winning title and this conflict contradicts and says a lot about the situation. And it’s today, where Uber is up fulfilling the long desire of the drivers.
What all was considered by the court
The court analyzed a few of the main elements the model is compiling of. Firstly, Uber set the fare which meant that they recorded how much drivers could earn, set the contract terms and drivers had no say in them. Moreover, ride requests are restrained, the firm can penalize drivers if they reject too many rides. Lastly, the firm monitors a driver’s work via the star rating and has the power to terminate the relationship if after repeated warnings.
The court and officials determined that these terms and elements showcase, the drivers can only increase their earnings if they would work for long hours. And that’s the reason why the ruling declared drivers being treated as Workers.
On this, several views and opinions came up, but the most prominent and noteworthy was-
“”We respect the Court’s decision which focused on a small number of drivers who used the Uber app in 2016.”Jamie Heywood, Uber’s Regional General Manager for Northern and Eastern Europe
The firm tried to give more clarifications over the business model it is following for a long time. They said they made enough changes and offered even more control over how the drivers can earn, and providing new protections like free insurance in case of an accident, injury, or sickness. Uber justifies, we are going to consult with every single UK driver across to understand the needs and changes they want to see, in order to improve.
Now the consequences of this new policy change by the ruling could be numerous, first and most important is Uber needs to spend more on wages for the drivers than earlier. It will raise its salary distributions spendings. Now you might be wondering, will we have to pay more for availing Uber rides than usual?
According to me, that remains to be seen in the coming days or months, but there’s the slightest probability of it. Back in 2019, Uber said that if it has to classify drivers as workers, it would “incur significant additional expenses” in compensating minimum wage and overtime. It added, any such scenario will radically change our business model, and will have an adverse effect on our business.
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