Today’s the day that an employment tribunal in London will decide whether Uber’s 40,000 licensed drivers are self-employed or “workers”. So far all the talk has been about sick-pay, holiday pay and the minimum wage. But “worker” (as in “personal service worker”) is a term recognised by the Pensions Regulator to mean an eligible or non-eligible jobholder – or at worst an entitled worker. All of these odd phrases carry pension rights and though the cost of those rights to Uber are at the moment a max of 1% of a band of earnings, the cost will treble within a couple of years as employer contributions nudge up.
Auto-enrolment for Uber’s 40,000 drivers?? – Uber employment tribunal: Ruling due in London https://t.co/cmxRHYeBp0
— Alistair McQueen (@HelloMcQueen) October 28, 2016
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So today’s decision may not just be important for Uber, it may be important for Auto-Enrolment and for everyone associated with what’s known as the “gig-economy”.
The Ubers and the Deliveroos are the obvious employers but there are thousands of smaller organisations in Britain who trade without workers and avoid setting up a workplace pension scheme. Perhaps this chap in the park is ignoring Workie because he owns one!
Is this man in the gig economy?
IMO – we cannot have a comprehensive funded pension system that excludes millions from its scope. I am in favour of opt-outs and include the genuinely self-employed as people who opt-out of workplace pensions. But I don’t reckon those who drive for Uber or ride for Excel, City Sprint, Addison Lee, Courier or Deliveroo are opting-out of anything.
Most of these people don’t even know that they aren’t in a pension – anymore than a lot of people who’ve been auto-enrolled know that they are.
I fear for us
I know the lack of pensions literacy, it is frightening.
People do not know the cost of not being in a pension scheme -even a 1% AE scheme.
People do not know the cost of retiring – till it’s too late
We need people to be “in” or to take a conscious decision to get out.
Would I be prepared to pay another 10% on my Umber fare to make sure their drivers are treated fairly – too right I would.
I fear for a nation that decides it’s alright for those just getting by to be excluded from pensions and the other benefits those in the gig-economy miss out on. It does not smack of the welfare I was brought up to expect (and accept to pay for).
If we’ve got used to ultra-cheap cab fairs at the expense of basic employment rights then we need to get used to higher cab fares and more expensive (home-delivered) pizzas.
If that sounds harsh, then you imagine what it’s like relying on Uber for a living.
UPDATE
Since this blog was published this morning, the GMB has won its case and UBER drivers are one ride closer getting a workplace pensions. Not everyone agrees this will happen
One does not want to appear dim but what is “Gig economy” or is this just a flash new word created by “Hipsters” to describe the age old employment status of “Short term contract/ Self employed”, I only ask?
the latter
totally agree.
Like me, you would be willing to pay a little more to ensure drivers are treated better.
Sadly, I don’t think this will happen.
More likely Uber will simply increase the percentage drivers have to pay them in order for them to pay it back as pension/holiday pay/ rest breaks/ etc.
So if a driver currently earns £100, they will end up earning 90 and getting another 10 in non-cash compensation.
And if it costs Uber a lot to set it up, they could even be worse off.
The government paraded the self employed revolution for high employment rates after the 2008 economic stumble, but now they want to tax them more (the net effect) for having the audacity to find employment.
These “schemes” perpetually run short of money.
I’m paying NI today but the way people talk I won’t be getting a state pension in 30yrs. That’s why we need AE today.
I’m paying into a DC pot today, but no doubt in 30yrs tax rates will be so high, inflation so high, the income after tax will be insufficient to be comfy in retirement and we’ll need another system of savings.
Hopefully we’ll be living in our socialist utopia by 2050 so I should have little to fear I suppose.
Groupthink always works.
Im sure for many uber drivers not being an employee is one of the attractions. Perhaps we should just leave them alone to decide how they spend their own money. If they lack pensions literacy it is up to the providers to educate them rather than rely on the government to impose a stealth pension tax from which they extort commission.
Commission extortion is a thing of the past nightrider, there are more subtle ruses to get at people’s money but we’re after the hidden charges too! The point about a pension tax would be valid if it wasn’t that everyone put into a pension- has the right to opt-out.
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