Uber drivers say they feel “misled” and “shafted” after it emerged that they have been paid up to 10 times less compensation for missed holiday pay than those who hired lawyers to take action against the company.
Drivers won payouts after the supreme court in February last year endorsed a landmark employment tribunal ruling that Uber drivers should be classed as workers with access to the minimum wage and paid holidays.
Uber set up an online portal in March 2021 through which it said drivers could claim compensation for holiday pay directly “without lengthy court proceedings”.
It is understood that 54,000 claimants – an estimated 80% of all eligible Uber drivers – have so far received payments via the portal, averaging £2,700.
The portal, which was open until July 2021, promised compensation for “historical trips” to drivers it deemed eligible, and those who applied direct also had the benefit of being offered cash within weeks.
Meanwhile, at least 15,000 opted to settle via lawyers, and they had to wait about a year for payouts to be agreed and awarded.
Now that the majority of drivers have been informed of their payouts, comparisons can be made. It has emerged that those who settled via their lawyers received many times more – in some cases over 10 times the average for those who used the portal.
The Guardian has seen details of one payout from a legal settlement which totalled over £45,000 – after legal fees of more than £10,000. One driver is understood to have decided to turn down an offer of about £3,000 via the Uber portal and continued with his legal claim, through which he received about £30,000. The negotiations were led by law firms Leigh Day and Keller Lenkner UK (now Keller Postman UK), with a number of other firms joining the litigation.
The US tech giant is facing unprecedented international scrutiny this week after the publication of the Uber files, a cache of thousands of confidential documents leaked to the Guardian. News of the settlements emerged separately, and is not part of the leak.
Drivers fear they will be unable to challenge the deals they received as anyone accepting Uber’s direct offer had to sign paperwork in which they pledged not to pursue further legal action over the matter.
One driver who accepted just under £4,000 last year, having worked about 60 hours a week for Uber for most of the seven years he was a regular for the app, said: “Everyone is feeling really angry about it.
“It was during the pandemic. I had no money coming in and I thought this is the best we are going to get. They misled us and told us this was the best we would get and it was calculated properly and talking to a lawyer would make no difference except they would deduct commission.
“Drivers have clearly been shafted. They didn’t know about it and Uber took advantage of Uber drivers because they did not [understand] the law. Everyone is fuming.”
Another driver who has worked for Uber for more than eight years said he had received just over £4,000 in compensation after applying directly through the company’s portal but had talked to a colleague who had worked fewer years but averaging similar hours who received more than £35,000, after fees as a result of joining one of the legal actions.
The driver said he had decided to move on from Uber after discovering how little compensation he had received in comparison. “We are the people who are loyal and this is how they treat us after those many years of hard work.
“[The payout] could have been substantial amount, a life changing amount for me. If the difference was only £1,000 or £3,000 then I would say let’s not even talk about it but it’s a big amount and big difference.”
It is understood that the difference between compensation agreed via the portal and those agreed via legal settlements is based on how holiday pay has been calculated – largely the cut off period for back payments but also the level of expenses allowable for each driver and how working time was calculated.
The Uber deal only went back two years, whereas it is understood that some legal settlements related to much longer periods.
It is understood that Uber limited payments to two years because of an employment regulation introduced in 2015 to limit the impact of large backdated claims on businesses.
However, the law on this point is unclear and it is understood that lawyers for the Uber drivers argued that ruling did not necessarily apply, allowing claims to be backdated further.
Uber declined to comment on the level of compensation per driver but it is understood that each payment depended on the drivers’ individual circumstances.
Compensation was calculated by looking at the two-year period prior to March 2021, and based on a 12.07% of their weekly earnings. Net earnings were calculated before expenses using the HMRC mileage allowance of 45p a mile for the first 10,000 miles driven each year, and 25p a mile for all subsequent miles each year.
Separately, if any driver received below national minimum wage during any working week their compensation was topped up to ensure they were paid at least that amount.
• This article was amended on 16 July 2022 to reflect that Keller Lenkner UK changed its name to Keller Postman UK between the article being written and published.
