Uber’s reluctant conversion to pensioning their drivers shows “it can be done”.

There was a big difference between the WPC discussion with employers and the conversations in previous weeks with consultants and providers.

The comments of Tim Jones, Carol Young, Gary Dewin , Tom Blenkinsop and particularly Uber’s Jamie Heywood were a lot more frank and robust.

Tom Blenkinsop spelt out what it is like running a small business where pensions are not core to the business’ progress. Carol Young explained that of the 70,000 members in the NatWest pension scheme only 10 have taken advantage of an advice offering paid for from their pension pot.Tim Jones, speaking for Tata said he did not think it was the employer’s job to provide financial advice in the workplace. Jamie Heywood spoke of Uber’s conversion to pension provision was driven by the law and not by competition. He pointed out that his competitors were seeking to make competitive advantage by not auto-enrolling their drivers.

In short, we were hearing from pragmatists dealing with the constraints on their jobs imposed by the commercial imperative of their organisations.

Listening to the second of the two sessions of the meeting advertised above, you become aware of the diversity of pension practice in the UK. Uber drivers can find they are in pensionable pay on one journey but non -pensioned pay the next journey, depending on the app their work comes from.

The excuse given for not getting a sharia option to the 90% of its drivers with Halal needs, was explained by the complexity of getting Uber drivers pensioned. To date 97,000 drivers are in the scheme, 17,000 more than are regularly driving for Uber. But opt-outs are running at 19%. The reality is that many Uber drivers become pensionable when they do  £192 earnings in a week meaning that occasional drivers can be enrolled. Meanwhile many  regular drivers opt-out. We know that some have done so for religious reasons and there may be a reduction in opt-outs later in the year, when the Sharia fund is in place

But WPC should take encouragement, even if the opt-out rate is as high as 19%, this is still much higher than most large employers opt out rates but a massive improvement on the the opt-in rate to personal pensions among the self-employed. As Carol Young of NatWest said, for all their expensive engagement plans, it is auto-escalation of contributions that has moved the dial on contributions within the bank.

On the day that the Committee was meeting, the GMB were taking Bolt (an Uber rival) to court for not following Uber’s lead. Uber shows that operationally auto-enrolment can be done for workers in the gig economy. There is a clear issue here with enforcement, something that Charles Counsell is clearly concerned about at the GMB.

Reluctant as Uber was to pay pensions to their workers, Heywood said that drivers appreciated holiday pay and pensions, They have 10,000 more active drivers than it had a year ago and Heywood suggested that Uber now appears a more attractive employer for the enforced changes.

It is important that other gig-employers listen to this evidence and consider their positions. They may think they have a competitive advantage by paying 100% of pay “cash in hand”, they may be mistaken.

Uber

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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