Responding to the news that Uber will now pay drivers a minimum
wage, holiday pay and pensions, Professor Len Shackleton, Editorial
and Research Fellow at free market think tank the Institute of
Economic Affairs, said:
"Uber has, as expected, accepted the Supreme Court judgment and
is offering the benefits to which worker status entitles drivers.
This will be costly to the company, and fares may ultimately rise
by about 30 per cent.
"Although they will be entitled to sick pay and holiday pay,
drivers may well end up out of pocket in the short run. The
entitlement to National Minimum Wage hourly rates is an illusory
benefit, as most were earning more than this anyway.
"Despite Uber's claims to the contrary, drivers may end up paying
higher tax and national insurance if the tax authorities query
their self-employment status. The pension scheme possibility may
seem attractive, but analysts have argued that those on low pay
gain very little from auto-enrolment as management charges are
disproportionate to the small amounts invested.
"If prices rise, the number of hires may recover from lockdown
levels more slowly, which also could leave drivers worse off.
Many may end up doing more work for less regulated and cheaper
minicab firms.
"More generally, a signal is sent out that innovative employment
possibilities must increasingly be shackled with regulations and
higher costs. This is a worrying message at a time when we face
the biggest employment challenge in decades."
