Press "Enter" to skip to content

Uber stock slides after UK court rules drivers are ‘workers’

Uber’s stock value tumbled Friday after Britain’s prime court stated its drivers needs to be handled as “workers” relatively than unbiased contractors.

Shares within the ride-hailing large slid 1.6 % in premarket buying and selling to $58.07 as of 9:17 a.m. following the UK Supreme Court’s ruling, which deemed Uber drivers eligible for protections such at least wage and paid depart.

The choice dealt a blow to Uber’s argument that its drivers are unbiased contractors who aren’t entitled to such advantages — a declare central to the company’s business mannequin.

Uber acknowledged that the ruling may have main implications for Britain’s ride-sharing business although it solely targeted on a handful of drivers who initially introduced the case in 2016. The company has about 60,000 drivers within the UK, together with 45,000 in London.

“Importantly, this case could set a precedent for other workers and companies in the gig economy throughout the UK and Europe which would be a body blow to the overall ecosystem,” Wedbush Securities analyst Daniel Ives stated in a Friday analysis be aware.

The Supreme Court unanimously shot down Uber’s enchantment of earlier rulings that sided with a bunch of drivers who challenged the company’s unbiased contractor mannequin.

The seven-judge panel discovered that Uber workout routines “significant” management over its drivers’ work and rejected the company’s argument that it merely facilitates transactions between drivers and riders.

Uber’s service “is designed and organized in such a way as to provide a standardized service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill,” the decision says.

The ruling took place three months after Uber scored a political victory in California, the place voters accepted a poll measure exempting ride-hail drivers from a controversial legislation that aimed to drive tech firms to deal with gig staff as staff. Uber and rival Lyft had threatened to halt their operations within the state earlier than the measure handed.

Uber identified that the “worker” standing the UK ruling afforded to a few of its drivers there was completely different from the nation’s “employee” classification, which supplies a wider vary of protections.

The San Francisco-based company additionally stated it has made “significant changes” to its British business for the reason that case was introduced in 2016, corresponding to giving drivers extra management over how they earn and offering free insurance coverage in case of illness or damage.

“We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see,” Jamie Heywood, Uber’s regional normal supervisor for northern and jap Europe, stated in an announcement.

With Post wires