Uber drivers say they feel “misled” and “misled” after it emerged they were paid up to 10 times less in compensation for missed holiday payments than those who hired lawyers to take action against the company.
The drivers won payouts after the High Court in February last year upheld a landmark employment tribunal ruling that Uber drivers should be classified as workers with access to the minimum wage and paid holiday.
Uber set up an online portal in March 2021 through which it said drivers could claim holiday pay compensation directly “without lengthy court proceedings”.
It is understood that 54,000 claimants – approximately 80% of all eligible Uber drivers – have so far received payments through the portal, averaging £2,700.
The portal, which was open until July 2021, promised compensation for “historic journeys” to drivers it deemed suitable, and those who applied directly also had the benefit of being offered cash within weeks.
Meanwhile, at least 15,000 chose to settle through lawyers and had to wait about a year for payouts to be negotiated and awarded.
Now that most drivers are aware of their payouts, comparisons can be made. It found that those who settled through their lawyers received many times more – in some cases more than 10 times the average for those who used the portal.
The Guardian has seen details of one settlement payout that totaled more than £45,000 – after legal fees of more than £10,000. One driver is known to have decided to reject an offer of around £3,000 through the Uber portal and moved on with his legal claim, which has netted him around £30,000. Negotiations were led by law firms Leigh Day and Keller Lenkner, with a number of other firms joining the litigation.
The US tech giant has faced unprecedented international scrutiny this week following the publication of the Uber files, a cache of thousands of confidential documents leaked to the Guardian. News about the settlements appeared separately and is not part of the leak.
Drivers fear they won’t be able to challenge the deals they’ve received, as anyone who accepts Uber’s direct offer must sign documents pledging not to take further legal action over the matter.
One driver, who took just under £4,000 last year after working around 60 hours a week for Uber for most of the seven years he was a regular on the app, said: “Everyone feels really angry about it.
“It was during the pandemic. I didn’t have any money and thought this was the best we were going to get. They misled us and told us this was the best we were going to get and that it was calculated correctly and talking to a lawyer wouldn’t matter except they would deduct a commission.
“The drivers are obviously crazy. They didn’t know about it and Uber took advantage of Uber drivers because they didn’t know [understand] The law. Everyone gets angry.”
Another driver who had worked for Uber for more than eight years said he received just over £4,000 in compensation after applying directly through the company’s portal but spoke to a colleague who had worked for fewer years but on average with similar hours, who received more than £35,000, after fees, as a result of joining one of the legal actions.
The driver said he decided to switch from Uber after discovering how little compensation he received in comparison. “We are the people who are loyal and treat us this way after these many years of hard work.
“[The payout] it could have been a significant amount, a life-changing amount. If the difference was only £1,000 or £3,000 then I’d say let’s not even talk about it, but it’s a big amount and a big difference.’
It is understood that the difference between compensation agreed through the portal and that agreed through legal agreements is based on how holiday pay is calculated – largely the cut-off period for overdue payments, but also the level of costs allowable for each driver and working hours were calculated.
The deal with Uber was only two years ago, while some legal agreements are understood to cover much longer periods.
It is understood that Uber has limited payments to two years due to an employment regulation introduced in 2015 to limit the impact of large backdated claims on business.
However, the law on the matter is unclear and lawyers for Uber drivers are understood to argue that the ruling is not necessarily enforceable, allowing claims to be retroactive.
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Uber declined to comment on the level of driver compensation, but it is understood that any payment depends on drivers’ individual circumstances.
Compensation is calculated looking at the two-year period prior to March 2021 and is based on 12.07% of their weekly earnings. Net earnings were calculated before costs using the HMRC mileage allowance of 45p per mile for the first 10,000 miles driven each year and 25p per mile for all subsequent miles each year.
Separately, if a driver was paid below the national minimum wage in any given workweek, their compensation was topped up to ensure they were paid at least that amount.
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