The number of people driving for Uber has hit an all-time high, the company’s second quarter results have revealed.
Almost five million people are now picking up passengers or making food deliveries for the company, 31% more than last year, boss Dara Khosrowshahi said. This is despite higher petrol prices and car maintenance overheads making it more difficult for drivers to earn money on the platform.
It is thought that fears over the cost of living have motivated people to drive for the company.
“Against the backdrop of elevated gas prices globally, this is a resounding endorsement of the value drivers continue to see in Uber,” said Khosrowshahi.
Despite the rise Uber has been struggling with a driver shortage since the pandemic, leading to longer waiting times for customers.
Last year’s UK Supreme Court judgment that ruled Uber’s UK drivers were workers entitled to holiday pay and the minimum wage and not independent contractors, contributed to a $983m revenue rise for the company globally. The company lost its challenge to the ruling in December 2021.
The ruling means the company can register the entirety of fares charged in the UK there as its revenue, as Uber acknowledged when it stated the $983m included “an accrual made for the resolution of historical claims in the UK relating to the classification of drivers.”
Gig economy
Ministers release guidance to clarify UK employment status case law
Bolt drivers strike as union launches workers’ rights tribunal
Part of the rise in revenue is also the result of higher fares, stemming from the workers classification, says Joe Aiston, employment lawyer at law firm Taylor Wessing. “Riders may have noticed a knock-on effect of those increased overheads reflected in higher prices for rides using Uber’s app.”
He confirmed: “A potentially unexpected outcome of this change in the status of Uber’s drivers has been that Uber is now able to record the value of gross bookings as revenue, rather than just Uber’s commission from the fares paid to drivers.
However, cautioned Aiston: “Revenue figures do not give an idea of a company’s profitability and it remains to be seen how the change in the employment status of Uber’s drivers will impact the company’s bottom line on a long-term basis.
The higher revenues seen at Uber may encourage other gig economy firms to implement changes in workforce legal status, he added. “In some cases, a decision to acknowledge those they engage as workers or employees and providing the employment rights that such status brings is seen as potentially providing a competitive advantage for users who may see this as the more ethical approach.
“However, although such an approach may result in increased revenue, the knock-on impact of increased costs for the business when engaging workers or employees will always need to be taken into account, including in terms of how this may impact on the prices that need to be charged to the user in times where many are concerned about a cost of living crisis.”
Ruth Moffett, also an employment lawyer at Taylor Wessing, said it was likely that drivers will seek to use other rights that their worker status affords them, including whistleblowing protection and the right to receive a written statement of term.
She said: “It is likely the number of employment tribunal claims raised against gig-economy employers will increase.”
In June, Oxford University’s Fairwork project identified the best gig economy companies to work for in the UK.
Latest HR job opportunities on Personnel Today
Browse more human resources jobs
