June 15, 2021

Uber hit with $600m UK drivers' bill after being forced to classify them as workers

May 05, 2021

Uber has set aside $600m (£430m) to resolve "historical claims" relating to its private hire drivers in the UK after it lost a legal battle over their employment rights.

The company said in March that it would give basic protections to 70,000 drivers in the country, following the Supreme Court defeat earlier in the year which meant they had to be classed as workers rather than self-employed contractors.

It meant they would have access to holiday pay and a pension scheme, as well as entitlement to be paid at least the national living wage - though Uber Eats delivery workers were not included.

A senior executive told Sky News at the time that it would be contacting its private hire drivers with settlement offers to make up for shortfalls in past pay.

First quarter financial results published in the US on Wednesday disclosed how much that is expected to cost.

The company said: "Uber has launched a process to resolve historical claims from UK drivers relating to their classification under UK law."

It said revenues were reduced by $600m "due to the accrual made" to resolve the claims.

That meant revenues for the quarter were down by 11% compared to the same period a year ago, to $2.9bn. Without the UK provision they would have grown by 8%.

But the company's bottom-line loss narrowed to $108m - thanks to a $1.6bn gain from the sale of its autonomous driving unit ATG - compared to a $2.9bn shortfall in the first quarter of 2020.

Uber's ride-hailing or "mobility" division has suffered a big downturn as a result of pandemic restrictions over the past year, contrasting with the success of its food delivery arm Uber Eats, which has prospered at a time when dining out has been banned in many places.

In the first quarter, mobility bookings were down 38% on the previous year at $6.8bn, though roughly flat on the last three months of 2020. Delivery bookings were up by 166% to $12.5bn year-on-year.

Uber's results come after it had already signalled signs of recovery, mainly thanks to vaccinations and the loosening of restrictions in the US.

It said last month that March had been the best month in the company's nearly 12-year history, with its mobility business reporting the most bookings since the start of the pandemic and delivery demand outstripping driver supply.

Announcing the latest results, chief executive Dara Khosrowshahi said: "Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings."

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