Uber blinks in U. K. labor fight

After landmark ruling, company reclassifies drivers as its workers.

LONDON — For years, Uber has successfully deployed armies of lawyers and lobbyists around the world to fight attempts to reclassify drivers as company workers entitled to higher wages and benefits rather than lower- cost, self- employed freelancers. Now the ride- hailing giant is retreating from that hardline stance in one of its biggest markets after a major legal defeat.

Uber this week said it would reclassify more than 70,000 U. K. drivers as workers who will receive a minimum wage, vacation pay and access to a pension plan. The decision, Uber said, is the first time the company has agreed to classify its drivers in this way, and it comes in response to a landmark British court decision last month that said Uber drivers were entitled to more protections.

The f r agil e business model of Uber and other gig economy companies depends on keep - ing labor costs down by using a sprawling network of workers defined as independent contractors. Although the services have been valued in the billions of dollars, they have struggled to turn a profit. In 2020, Uber reported a net loss of $ 6.8 billion.

The court decision was cheered by labor activists who have spent years criticizing how companies such as Uber, Lyft, Doordash and Grubhub treat drivers and delivery people.

Uber said that, starting Wednesday, all drivers in Britain would be defined as “workers,” a legal classification in the country that entitles the drivers to a minimum wage and vacation time. It does not give the full protections of the classification known as full “employee,” which includes paternity and maternity leave and severance pay if dismissed, among other benefits.

Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, said the company’s move put pressure on other ride- hailing companies to adopt similar policies in Britain.

FRANK AUGSTEIN/ AP Uber drivers of the App Drivers & Couriers Union listen to the Feb. 19 decision in London by the U. K. Supreme Court, which ruled Uber drivers should be classed as “workers,” not self- employed.