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Uber says making UK drivers workers cost US$600mln

 

Uber Technologies Inc (NYSE:UBER) has revealed it cost US$600mln to reclassify its UK workers as staff rather than contractors.

The ride-hailing app made the switch in March and it meant 70,000 staff were entitled to legal rights such as minimum wages, holiday pay and a pension.

Pressure is also mounting in the US on ‘gig-economy status and last week US Labor Secretary Marty Walsh told Reuters that “a lot of gig workers should be classified as employees.” 

Uber said yesterday it was hoping to have talks with the Biden Administration to resolve the issue.

The taxi firm added that its cut from the price of each ride would also fall to around 20% going forward enabling drivers to earn more.

Uber posted underlying losses of US$359mln in the first-quarter to end-March 2021, an improvement of US$95mln on the previous three months.

Revenue including the US$600mln charge for the UK rose by 8% quarter-on-quarter to US$3.5bn.

Nelson Chai, CFO, told reporters the company would become profitable in the “second half of the year”.

Trading patterns in the first quarter reflected the impact of lockdowns around the world with delivery, which includes Uber Eats, increasing sales by 28% to US$1.7bn but rides were flat.

Since March, however, rise demand has recovered strongly with reports that Uber and its rival such as Lyft are struggling to find the drivers to cope with the demand.

Uber shares dropped 3.4% overnight. 

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