Uber is to pay out millions of pounds in missed pension payments to UK drivers dating back as far as 2017 under a deal with the retirement savings watchdog.
The ride hailing company was forced to guarantee its 70,000 UK drivers a minimum hourly wage, holiday pay and pensions in March this year after a landmark supreme court ruling over their employment status. Couriers for the group’s UberEats food delivery service are not included in the deal.
On Friday, Uber said its private hire drivers would now be auto-enrolled on to a scheme through which it would contribute 3% of earnings into a pension pot. Drivers can choose to contribute up to 5% of qualifying earnings but will be able to opt out.
Drivers will also receive back payments dating back to 1 May 2017 or the date of their first trip if they joined more recently.
Uber, whose scheme is provided by NOW: Pensions and managed by Adecco, called on rival operators to help create a cross-industry scheme so that drivers who worked across several apps would always benefit.
Jamie Heywood, Uber’s regional general manager of northern and eastern Europe, said: “We want to ensure that all eligible drivers can benefit no matter who they earn with, so today I am extending an invitation to work with operators such as Bolt, Addison Lee and Ola to create a cross-industry pension scheme.”
Mick Rix, national officer of the GMB union, which agreed a recognition deal with Uber in May, said: “Uber’s pension scheme is a massive step in the right direction and will no doubt help thousands of drivers as they reach retirement age. GMB urges other platform-based operators to follow Uber’s lead.”
James Farrer, general secretary of the ADCU union, said: “Uber’s 3% pension contribution is welcome but it falls far short of what drivers deserve. Poor pay and Uber’s failure to pay waiting time continue to be a huge source of discontent for the workforce, which is why the ADCU is staging a 24-hour Uber driver strike across eight UK cities on 28 September.”
Uber’s deal comes after a supreme court ruling found the ride hailing group’s private hire drivers should be classed as workers, with rights to minimum hourly pay, holiday pay and a pension. The company had previously classed them as independent self-employed contractors with few rights.
In May, the UK’s pension regulator said it was working closely with Uber on its scheme and called on all gig economy companies to recognise the employment rights of those who work for them and set up workplace pensions.