Uber Technologies Inc. (NYSE: UBER) is taking a big step forward in terms of the benefits for its drivers after settling a court case across the pond. Essentially, the ride-sharing company is granting worker status, a minimum wage and even vacation time in the United Kingdom.
The firm was defeated in the U.K. driver classification case, where the Supreme Court ruled last month that its drivers are workers. As such, Uber is reclassifying its 70,000 U.K. drivers as workers, giving them a guaranteed minimum wage, holiday pay and pensions.
It’s worth noting that classifying its drivers as workers is different than classifying them as employees, which would grant them even greater privileges.
Following this reclassification, Uber drivers will receive a minimum wage of £8.72 an hour ($12.13), for those aged 25 years and above. This will take effect on Wednesday. However, this minimum wage will be paid only when they accept a trip request and not during the time they spend waiting for people to book rides. Uber said that on average drivers earn an hourly £17 in London.
Apart from minimum wage, Uber drivers will receive holiday pay based on 12.07% of their earnings, on a biweekly basis. Drivers also will be enrolled into a pension plan. Uber noted that drivers will be at least 15% better off if they opt into the pension plan.
Excluding Wednesday’s move, Uber stock had outperformed the broad markets with a 15% gain year to date. In the past 52 weeks, the share price was up closer to 190%.
Uber stock traded down 3% to $57.03 Wednesday morning, in a 52-week range of $13.71 to $64.05. The consensus price target is $68.67.