After being hit with a $600 million (£430 million) fine in the United Kingdom, Uber has reached an agreement with the GMB union, allowing 70,000 drivers to join.
Uber had to set aside $600 million (£430 million) to satisfy "historical claims" connected to its private hire drivers in the United Kingdom after losing a legal dispute over their job rights. Following a fine, Uber was forced to act, and for the first time in the UK, a firm like Uber has recognised a trade union, reversing its former position.
Uber and GMB have reached a historic agreement that will allow at least 70,000 Uber drivers to join the union.
(Previously) Supreme Court settlement Following a Supreme Court setback earlier this year that required them to be classified as employees rather than self-employed contractors, the firm announced in March that it would provide basic rights to 70,000 drivers in the country. It meant they'd have access to paid time off and a pension plan, as well as the right to be paid at least the national living wage - albeit UberEats delivery drivers weren't covered.
At the time, a senior official informed Sky News that the company will be contacting its private hire drivers with settlement offers to make up for prior pay gaps. The expense is expected to be reported in the first quarter financial results released in the United States on 5th May.
The company said: "Uber has launched a process to resolve historical claims from UK drivers relating to their classification under UK law," the company said.
Revenues were lowered by $600 million "due to the accrual made" to settle the claims, according to the company. This resulted in an 11% decrease in sales for the quarter, to $2.9 billion, as compared to the same period last year. They would have increased by 8% if the UK provision had not been in place.
However, the company's net loss was reduced to $108 million, thanks to a $1.6 billion gain from the sale of its autonomous driving subsidiary ATG, compared to a $2.9 billion shortfall in the first quarter of 2020.
Uber's ride-hailing or "mobility" segment has seen a significant drop in the last year as a result of pandemic restrictions, in contrast to the success of its food delivery subsidiary UberEats, which has thrived at a time when dining out is prohibited in many regions. Mobility bookings were down 38% year on year in the first quarter, totalling $6.8 billion, while relatively flat compared to the last three months of 2020. Year on year, delivery bookings increased by 166% to $12.5 billion.
Uber's results come after it had already shown indications of recovery, owing primarily to vaccines and the relaxation of restrictions in the United States.
Last month, it announced that March had been the strongest month in the company's nearly 12-year existence, with its mobility division reporting the highest bookings since the outbreak began, and delivery demand outstripping driver supply.
"Uber is starting to fire on all cylinders, as more consumers are riding with us again while continuing to use our expanding delivery offerings, "CEO Dara Khosrowshahi said in a statement announcing the latest results.
Latest Update The move, Uber claimed in a statement on the 26th of May, would give drivers a stronger voice within the company, while expanding on improvements introduced earlier this year that guarantee workers benefits such as holiday pay and a pension system.
It's the company's latest setback after losing a Supreme Court battle in 2016 over its attempt to categorise drivers as self-employed contractors rather than employees. Trade union representatives will be present in Uber's driver support hubs to assist raise membership, according to the agreement announced on Wednesday.
GMB and Uber have agreed to meet every three months to discuss driver issues and concerns, such as salaries and perks. Please contact Persona Finance [enquiries@personafinance.co.u] for accounting and business guidance.