Uber to cut drivers’ pay in search for profits

UBER expects “driver dissatisfaction” to grow as the company squeezes pay in its drive to turn a profit, documents filed ahead of its $100bn (£76bn) listing have revealed.

The taxi-hailing giant said it is planning a cut to drivers’ incentives after it goes public in a blockbuster listing in New York as it fights to turnaround its heavily loss-making business.

In documents filed with the US Securities and Exchange Commission on Thursday night, the company said it expects its more than 2m drivers to shoulder the burden as it works to improve its financial results and cut operational losses, which stand at $3bn.

“In particular, as we aim to reduce driver incentives to improve our financial performance, we expect driver dissatisfaction will generally increase,” Uber said.

Uber said that its business would be “adversely affected if drivers were classified as employees instead of independent contractors”. The company also claimed that it could face “significant costs” over arbitration and court claims from drivers. Over 60,000 drivers have expressed an intention to lodge arbitration demands against Uber, which could cost it $90m (or $1,500 each), in filing fees alone.

In the UK, Uber also faces a forthcoming Supreme Court appeal after it failed to overturn a ruling that granted its drivers workers’ rights.

According to James Farrar, the chairman of the United Private Hire Drivers branch of the IWGB union who has challenged Uber in court, the filing reveals the greed of the company.

“It warns investors that drivers are deeply dissatisfied but, rather than address their concerns, it instead promises to slash pay further,” he said.

But Uber’s plans to wean drivers off of unprofitable incentives do not stop there. Its ambitions for driverless cars would cut adrift many drivers entirely.