Uber Latest Figures Show Higher Commission For New Drivers Lowering Earnings By £1 Per Hour To £5.68 Per Hour For Top Paid Drivers In London
The extra commission is costing drivers between £50 and £70 per week or £1 per hour which that cannot afford to lose says GMB.
GMB Uber drivers, using the companies own figures, assess that hourly earnings for new Uber drivers are £1 per hour lower than they would be for existing drivers and are just above £14 per hour before costs when the commission hike of 5% is applied.
On 12 November GMB held a protest demonstration at Uber's office in London to co-incide with the commission for new Uber drivers increasing by a quarter from 20% to 25% as of that date. This increase will cut the incomes of up to 20,000 cab drivers by up to £50 per week. It could yield up to £50m additional revenue per year to Uber. See notes to editors for copy of GMB press release on Uber matters.
On 29th Oct solicitors Leigh Day, on behalf of GMB members working for Uber, issued a claim at the London Central Employment Tribunal that the company does not provide drivers with basic workers’ rights. Uber is in breach of a legal duty to provide drivers with basic rights on pay, holidays, health and safety and on raising complaints.
Set out in the table below are gross weekly income and typical operating costs to arrive at the net take home figure for a new top driver
Weekly UberX income 46.1 hours at £19 £875.90
Uber commission at 25% £218.98
Prius PCO rental £270.00
Uber devices and network fee £5.00
Car Wash £15.00
Mobile phone costs £5.00
Total costs to be deducted £613.98
Net weekly income £261.92
Net income per hour £5.68
James Farrar, GMB union representative for Uber drivers, said “Uber says it's top drivers gross £19 per hour and they work 46.1 hours per week. But after commission and easily estimated operating cost drivers, at best, are taking home just £5.68 per hour, 15% below the national minimum wage. And remember, these are just the ‘top drivers’, it doesn’t even represent what average drivers make.
Uber says it looks at driver's income very carefully - I don't doubt they do - which makes their decision to grab another 5% commission off the top unconscionable. The extra commission is costing drivers £50-70 per week or £1 per hour which that they cannot afford to lose.
Uber will say that driver operating models vary greatly and it’s up to us to control costs. But that just isn’t the case. The largest typical cost item is car rental and the £270 pcm figure above comes from PCO Rentals, an approved supplier listed in the Uber Marketplace. £100 per week in fuel is a more than reasonable estimate and the rest of the costs are self-explanatory. These are typical costs for thousands of drivers no matter how hard Uber try to spin otherwise.
Also consider that the hours calculated here are just the logged in hours and total on the road hours including positioning, rest breaks, fueling, cleaning etc are likely to be another 30% which further dilutes even these best case figures.
Yet besides the obvious driver financial deprivation, long hours and increasingly congested streets, rather than suspend or slow down on boarding or raise prices – Uber adds to the suffering by making a grab for another 5% commission.
Over the past year private hire drivers have seen their incomes go into free fall and costs escalate. TfL is adding an additional 1,000 new licensees to streets every month in London which has led to market saturation, huge increases in private hire vehicle rental costs & more congestion in London impacting productivity.
Because Uber acts as a rentier and dis-intermediator it has slashed prices three times knowing that it is drivers that will ultimately bear the cost not the $40 billion global corporation. Now to profiteer further it has increased it's share of the fare by 5% pushing drivers even further into poverty.”
Contact:Elly Baker on 07918 768 773 or Simon Rush on 07863 256411 or Steve Garelick 07565 456 776, or Michelle Bacon 07961 709680 or GMB press office 07921 289 880 or 07974 251 823.
Uber drivers can contact GMB at firstname.lastname@example.org
For Leigh Day David Standard 07540 332717 or Nigel Mackay on 020 7650 1155
Notes to editors
Copy of previous GMB press releases:
1 GMB press release dated 11th November
GMB UBER DRIVERS LONDON PROTEST ON THURSDAY 12TH NOVEMBER OVER UBER INCREASING DRIVERS COMMISSION BY A QUARTER TO RAKE IN UP TO £50M PER ADDITIONAL REVENUE PER YEAR FROM DRIVERS
Drivers like working for Uber but increased numbers of drivers, commission increases and price cuts are driving us into poverty says GMB Uber drivers
GMB, the union for Uber cab drivers, is holding a protest demonstration at Uber's office in London on Thursday 12th November to co-incide with the commission for new Uber drivers increasing by a quarter from 20% to 25% as of that date.
This increase will cut the incomes of up to 20,000 cab drivers by up to £50 per week. It could yield up to £50m additional revenue per year to Uber.
On 29th Oct solicitors Leigh Day, on behalf of GMB members working for Uber, issued a claim at the London Central Employment Tribunal that the company does not provide drivers with basic workers’ rights. Uber is in breach of a legal duty to provide drivers with basic rights on pay, holidays, health and safety and on raising complaints. See notes to editors for copy of GMB press release dated 29th July with details of the claim.
In September GMB released income and expenditure details for a member working exclusively for Uber as a cab driver in London. The driver was paid £5.03 net per hour for 234 hours driving during August calendar month. This is £1.47 per hour below the national minimum wage of £6.50 per hour. For each hour he worked the fees he paid to Uber were £2.65 per hour which equated to 53% of his net pay per hour. See notes to editors for copy of GMB press release dated 7th September with the details.
The details of the photocall protest are as follows:
From 11am to 1pm Thursday 12 November
Outside Uber's Offices,
2 Leman Street,
London E1 8FA
There will be Uber drivers there with flags and banners and placards with slogans such as Uber driving us to poverty; Uber - when sharing isn't caring; Uber - we want Fair Fares; No to pay cuts at Uber. They will be available for interview.
James Farrar, GMB senior union representative for Uber drivers, said“GMB drivers such as myself like working for Uber but increased numbers of drivers, commission increases and price cuts are driving us into poverty.
GMB is seeking a commitment from Uber to halt any more commission increases or fare cuts, a commitment to cap driver recruitment so all drivers can achieve the living wage equivalent and commitment to properly consult with drivers on changes to work practices
Low incomes mean long hours which means increased safety risk for drivers, passengers and other road users. GMB members want Uber to be successful but for it be so it must give drivers a fair deal.
Elly Baker, GMB National Officer for professional drivers, added "GMB is calling on TFL and Uber to recognize the key point that safeguarding passenger safety and driver income are two sides of the same coin. You cannot have one without the other.
This means that drivers need to be protected from dwindling income forced by the failure to cap numbers which in turn increase risks to passengers.
There should be an agreed cap on the number of licenced vehicles and drivers in London. All vehicles and drivers must meet agreed standards.
Fares should be set at a level that all operators including Uber can enable drivers to earn a living without excessive hours avoiding the risks of driver fatigue and places an obligation on the operator for occupational safety.”
2 Press release dated 7th September
GMB LONDON UBER DRIVER MEMBER PAID £1.47 PER HOUR BELOW MINIMUM WAGE FOR 234 HOURS IN AUGUST AS UNION SEEKS TRIBUNAL RULING ON UNDERPAYMENT
Union plans to recover underpayment on the national minimum wage as part of the Tribunal claim that Uber drivers are directed workers says GMB Professional Drivers
A GMB member who works exclusively for Uber as a cab driver in London was paid £5.03 net per hour for 234 hours driving during August calendar month. This is £1.47 per hour below the national minimum wage of £6.50 per hour. For each hour he worked the fees he paid to Uber were £2.65 per hour which equated to 53% of his net pay per hour.
In July GMB, the union for professional drivers, announced that it had instructed Leigh Day to take legal action in the UK on behalf of members driving for Uber on the grounds that Uber is in breach of a legal duty to provide them with basic rights on pay, holidays, health and safety and on raising complaints. See notes to editors for copy of GMB press release and copy of article from the Times on this litigation.
GMB is asking Uber drivers to keep detailed records of income and expenditure so that underpayment of the national minimum wage can be recovered as part of the Tribunal claim that Uber drivers are directed workers and thereby covered by legislation on pay, holidays, health and safety and on raising complaints.
Set out in the table is a summary of the details of total income and expenditure and hours worked by this GMB member. GMB is happy to share the details with media outlets.
Total income from all sources working for Uber
Less Uber fees
Less other expenditure
Pay for August
Total hours in August
Pay per hour
Uber fees per hour
Other expenditure includes: Licensing; MOT; Road Tax; Servicing / Maintenance; TfL Inspection; Car Finance; Fuel; Insurance; Parking; Uber deductions.
Steve Garelick , Secretary of the GMB professional drivers branch, said " In August this GMB cab driver working for Uber kept detailed records of time spent driving and his income and his expenditure.
Taking into account his expenditure, this GMB member was paid £5.03 for every hour he worked in August. Fees he paid to Uber were £2.65 for every hour he worked or 53% of his hourly pay.
The hourly pay is below the national minimum wage of £6.50. If TfL keep issuing new licenses and Uber keep expanding - driving down fares, upping commissions - this will only get worse.
This fall in drivers incomes poses a threat to public safety. This is because as driver incomes fall they have to work more hours to make the same money. Uber don’t control hours and neither do TFL. Drivers fatigue is a huge public safety and occupational risk.
GMB plan to recover underpayment on the national minimum wage as part of the Tribunal claim that Uber drivers are directed workers.
We want all Uber drivers to keep detailed records so that we can recover the underpayment for them."
3 Copy of article in the Times
Future of Uber is in the hands of the courts
Published at 12:01AM, September 3 2015
Employment status, particularly where technology allows for new, complex working arrangements, is key to the outcome.
Serious legal problems are piling up for Uber. There is a law suit in Canada and a recent ruling in California in which a judge has granted class-action status to a lawsuit by three Uber drivers against the international taxi booking company.
Now there are also legal proceedings to be issued later this month in the UK, launched by the GMB union on behalf of drivers.
At stake in the UK and US cases is the status of Uber drivers — are they workers or employees, as opposed to independent contractors? For Uber, any court that answers “yes” may badly hurt its basic business model.
The GMB claims that Uber is denying its drivers basic workers’ rights to which they are entitled, including the right to the national minimum wage, holiday pay and rest breaks, by classifying them as self-employed “business partners” rather than “workers’ or ‘employees”. The case gives prominence to the issue of determining the employment status of individuals, particularly where developments in technology give rise to new, complex working arrangements.
Whether an individual is an employee, a worker, or a self-employed contractor is important in determining the rights and protection that they receive under UK employment law. An individual who is self-employed will not benefit from employment rights, whereas a worker will enjoy certain rights and protections, including the right to receive the national minimum wage and paid holiday, the right to mandatory rest breaks and whistleblowing protection. An employee will have the same rights as workers, as well as additional rights, such as the right not to be unfairly dismissed and the right to receive statutory redundancy pay.
Businesses who favour engaging self-employed contractors, rather than workers or employees, do so because it can be a more cost-efficient and flexible arrangement. The advantages to the company of this business model are priced into the business plan, which becomes dependent on the validity of the arrangement to deliver anticipated returns. Therefore some “employers” may treat an individual as a self-employed contractor, without giving consideration to their proper employment status.
But determining employment status can be complex. Whether an individual is self-employed, a worker or an employee will depend on a number of factors, including the level of control that the “employer” has over the individual. In this specific case, Uber claims that their drivers use the Uber app on their own terms and control their own use of it, whereas the GMB maintains that Uber controls passenger charges and the routes that the drivers must follow. The court, in considering employment status, will not only need to have regard to the relevant law and cases in this area, but it will also need to consider how old employment law principles apply to these new types of working arrangement.
A decision in favour of the GMB could, therefore, prove very costly for Uber. The company may be required to pay compensation for past failures to make appropriate payments, such as sick pay and holiday pay. Uber will also be obliged to bear a greater degree of responsibility for their drivers in the future, including ensuring that their drivers receive adequate rest breaks and taking reasonable steps to ensure that they do not work longer than 48 hours per week on average (unless the drivers choose to opt-out of this limit), as required under the Working Time Regulations 1998.
The California ruling held that a driver for Uber is an employee rather than a contractor and the Canada claim runs into many millions — these and the GMB case are doubtless being watched by Uber’s many competitors and detractors around the world.
Hannah Farley is a solicitor in the employment department at Stewarts Law LLP
4 Copy of GMB press release dated 27th July 2015
LEIGH DAY LEGAL ACTION FOR GMB UBER DRIVERS TO SECURE RIGHTS ON PAY, HOLIDAYS, HEALTH AND SAFETY, DISCIPLINE AND GRIEVANCES
The Uber assertion that drivers are “partners” who are not entitled to rights at work normally afforded to workers will be legally contested in court says GMB
GMB, the union for professional drivers, has instructed Leigh Day to take legal action in the UK on behalf of members driving for Uber on the grounds that Uber is in breach of a legal duty to provide them with basic rights on pay, holidays, health and safety and on discipline and grievances.
GMB is contesting the Uber assertion that drivers are “partners” so are not entitled to rights normally afforded to workers.
Uber operates a car hire platform that connects passengers to thousands of drivers through an app on the passenger’s smartphone.
Using the app, passengers can request they are picked up from any location within London (or 300 other cities worldwide). Passengers pay Uber for the journey, which then passes on a percentage of that payment to the driver.
GMB claim that Uber should conform to employment law as follows:
· Uber should ensure that its drivers are paid the national minimum wage and that they receive their statutory entitlement to paid holiday. Currently Uber does not ensure these rights for its drivers
· Uber should address serious health and safety issues. Currently Uber does not ensure its drivers take rest breaks or work a maximum number of hours per week. GMB content that this provides a substantial risk to all road users given that, according to Uber’s CEO, there will be 42,000 Uber drivers in London in 2016.
· Uber should adhere to legal standards on discipline and grievances. Currently drivers have being suspended or deactivated by Uber after having made complaints about unlawful treatment, without being given any opportunity to challenge this.
Nigel Mackay, a lawyer in the employment team at Leigh Day, said “The Uber assertion that drivers are “partners” who are not entitled to rights at work normally afforded to workers is being contested.
Uber not only pays the drivers but it also effectively controls how much passengers are charged and requires drivers to follow particular routes. As well as this, it uses a ratings system to assess drivers’ performance.
We believe that it’s clear from the way Uber operates that it owes the same responsibilities towards its drivers as any other employer does to its workers. In particular, its drivers should not be denied the right to minimum wage and paid leave.
Uber should also take responsibility for its drivers, making sure they take regular rest breaks.
If Uber wishes to operate in this way, and to reap the substantial benefits, then it must acknowledge its responsibilities towards its drivers and the public.
A successful legal action against Uber could see substantial pay outs for drivers, including compensation for past failures by the company to make appropriate payments to who we argue are their workers.”
Steve Garelick, Branch Secretary of GMB Professional Drivers Branch, said “The need for a union to defend working drivers’ rights has become an imperative.
Operators like Uber must understand that they have an ethical and social policy that matches societies’ expectations of fair and honest treatment.
For far too long the public have considered drivers as almost ‘ghosts”. They are not seen as educated or with the same needs, aspirations and desires as the rest of the public.”