Uber as of Wednesday will reclassify its drivers as "workers" in the United Kingdom, the company announced, entitling them to some benefits according to U.K. employment law. The new designation comes after Uber lost its appeal of the U.K. Supreme Court's ruling last month that their drivers should be classified as workers. Since 2016, Uber has been in legal and regulatory battles in the U.K. over whether to drivers as "self-employed" or "workers" according to U.K. employment law.
Under the designation, Uber will pay its more than 70,000 drivers in the U.K. minimum wage, which stands at £8.72, and offer them pensions and holiday pay. The U.K. represents more than 6 percent of Uber's ride-hailing bookings, according to an Uber filing with the U.S. Securities and Exchange Commission, making it among its largest markets.
The worker designation also follows the passage of California's 2020 ballot measure, which similarly guaranteed drivers some benefits. Under the measure, ride-hailing service providers must provide drivers with a minimum wage and subsidies for healthcare depending on the number of hours a driver worked but will still be allowed to classify drivers as contractors instead of full-time employees.
While the new requirements have led to a price increase in Uber's ride-hail services in the state, the ballot measure was "the right outcome for riders and drivers of Uber," CFO Nelson Chai said in Uber's most recent earnings call. "The price increases are manageable when compared to the 100-plus increase associated with traditional employment, [which] would have seen us exit most markets in California—and not just us, but our other competitors as well."