Uber’s decision comes after successive defeats in the British courts, which denied the company to treat drivers as self-employed. But in Brazil there are no signs of changes in this understanding in Brazilian courts.
There are three benefits of traditional jobs that are not enjoyed by those who work in the so-called “shared economy”. But that seems to have started to change.
Guaranteed minimum wage, paid vacations and retirement.
On Tuesday (16/3), Uber announced that it will grant these three benefits to its drivers in the UK, a move that could transform the current shared economy.
The company said its drivers will earn at least the national minimum wage paid to people over 25 in the UK, around R $ 70 an hour.
The decision comes a month after the American company lost a long legal battle in the United Kingdom, which started in 2016, over the drivers’ labor situation.
Sought by the BBC, Uber said it does not expect the change in drivers’ conditions to translate into higher tariffs for customers.
Union leaders and labor experts say that this shift at Uber could have far-reaching consequences for the shared economy.
Rachel Mathieson, a lawyer who represented Uber drivers who are fighting for more rights, called the announcement a “very important milestone”.
At a British Supreme Court hearing last month, Uber introduced itself as an outsourced reservation agent, claiming that its drivers were self-employed.
But the court ruled that the drivers were “workers”, a professional category in the UK that gives them the right to a minimum wage, vacation and retirement.
Uber faces similar legal processes in several countries, where it is debated whether drivers should be considered employees or self-employed.
In Brazil, in several cases, the Public Ministry of Labor and ex-drivers went to court to claim employment bonds between professionals and companies, which would guarantee a series of rights provided for by the CLT (Consolidation of Labor Laws).
But the Brazilian Justice has consistently denied these demands, including the Superior Labor Court (TST).
The decision comes a month after the American company lost a long legal battle in the United Kingdom, which started in 2016, over the drivers’ labor situation.
Sought by the BBC, Uber said it does not expect the change in drivers’ conditions to translate into higher tariffs for customers.
Union leaders and labor experts say that this shift at Uber could have far-reaching consequences for the shared economy.
Rachel Mathieson, a lawyer who represented Uber drivers who are fighting for more rights, called the announcement a “very important milestone”.
At a British Supreme Court hearing last month, Uber introduced itself as an outsourced reservation agent, claiming that its drivers were self-employed.
But the court ruled that the drivers were “workers”, a professional category in the UK that gives them the right to a minimum wage, vacation and retirement.
Uber faces similar legal processes in several countries, where it is debated whether drivers should be considered employees or self-employed.
In Brazil, in several cases, the Public Ministry of Labor and ex-drivers went to court to claim employment bonds between professionals and companies, which would guarantee a series of rights provided for by the CLT (Consolidation of Labor Laws).
But the Brazilian Justice has consistently denied these demands, including the Superior Labor Court (TST).
Uber pointed out in its statement announcing the changes that a “worker” is a unique classification under UK labor law.
Workers are not permanent employees, but are entitled to the minimum wage, vacation and pension.
The company said the UK Supreme Court’s recent decision provided a clearer path to a model that gives drivers the “worker” rights while continuing to let them work flexibly professionally.
Criticisms of the extent of Uber’s move
In the long legal battle, Uber had appealed to the British higher court after losing in three lower courts.
The Court ruled in February 2021 that Uber would have to treat drivers as “workers” from the moment they connect to the app until the moment they disconnect.
That was one of the key issues, because Uber drivers generally spend part of their time waiting for passengers to request a trip through the app, and that period is unpaid.
Before, the company had said that if drivers were to be considered “workers”, then this should only apply as long as there are passengers in the vehicle.
James Farrar and Yaseen Aslam, the two former drivers who started the legal battle against Uber in 2016, enthusiastically welcomed the company’s decision, but warned of a possible problem.
Both considered that the Supreme Court decision meant that drivers should have “worker” status from the moment they log in until the moment they log out of the app.
However, Uber commits itself only to this condition of “worker” from the moment the trip is accepted until the passenger arrives at its destination.
Uber drivers “will still suffer a lot, between 40 and 50%. Furthermore, it is not acceptable for Uber to unilaterally decide the driver’s spending base in calculating the minimum wage. This should be the subject of a collective agreement”.
Possible impacts on the industry
Employment experts said the consequences of Uber’s changes will be felt throughout the so-called shared economy.
Mary Walker, a labor attorney and partner at the Gordons law firm, said: “The shift to Uber drivers with the payment of minimum wages and unpaid vacations will cause many companies to urgently review their practices and the associated risks.”
She believes that the additional costs associated with the shared economy mean that “some companies simply will not be able to continue operating”.
Other companies may restructure, but perhaps with fewer workers, said Walker.
Union leaders also pointed out that other companies in the shared economy will have to change. “This is the end of the line for false self-employment,” said Mick Rix, secretary general of the GMB union, which has been fighting for labor rights in the court of law.
“It is a pity that the GMB won four legal battles to make sense of the claims, but in the end we got there and, in the end, this is a huge victory for our members. Other companies in the gigantic economy must realize this. “said Rix.
Analysis by Caroline Davies, BBC reporter specializing in transport
Union leaders can barely contain the excitement with Uber’s changes. After years of legal battles, they speak of David’s victory against Goliath.
And they hope it can create a domino effect. Other companies in the shared economy are expected to be carefully evaluating the British Supreme Court’s verdict in February.
The fact is that Uber chose fundamental changes to its system instead of resisting it may encourage other companies to do the same.
Uber has transformed markets around the world, and this labor shift could have similar repercussions.
