Taxi-hailing app Uber has announced plans to increase employee benefits for its drivers in response to the UK government’s report into the gig economy today.
Prime Minister Theresa May has said she would improve rights for those working in the so-called gig economy, a labour market characterised by the prevalence of short-term contracts or freelance work.
The government’s proposals include ensuring workers in the gig economy receive sick and holiday pay, a possible higher minimum wage for non-guaranteed hours and a new definition of “dependent contractors” to stop companies from wrongly claiming their staff are self-employed.
Her recommendations follow a review into the gig economy, headed by Matthew Taylor, a former adviser to Tony Blair.
It means contractors working for companies such as taxi app Uber and Deliveroo would receive more benefits.
Uber and Deliveroo have been criticised by MPs for using self-employed workers to avoid significant costs including national insurance and pensions contributions.
Uber welcomes government's proposals for gig economy
Andrew Byrne, head of policy for Uber in the UK, welcomed the government’s recommendations and said the company would be improving its offer to drivers.
Uber has a number of self-employed people working simultaneously for different employers without fixed contracts.
Byrne said Uber’s drivers already earned on average more than the living wage of £7.50 an hour.
"We know drivers want more security too which is why we’re already investing in discounted illness and injury cover, and will be introducing further improvements soon," he said.
Deliveroo says restricting gig economy could hurt sector
Separately, Deliveroo said restricting the flexibility of the gig economy could undermine the sector.
"The government needs to ensure that any new measures are pro growth so that companies can continue to expand and create well paid opportunities for people in the UK," the British takeaway courier firm said in a statement.
"The government should be under no illusions that any moves to restrict flexibility could undermine the very thing that attracts people to work in this sector."
May defended the report at its launch in London, saying she will help the government "to ensure that the interests of employees on traditional contracts, the self-employed and those people working in the 'gig' economy are all properly protected".
She also stressed that Britain must retain flexibility in the labour market by avoiding "overbearing regulation".