Uber Technologies Inc., San Francisco, is launching a defined contribution plan for its drivers in the U.K. on Friday following a ruling by the U.K. Supreme Court that said drivers should be considered workers and not self-employed.
Under the ruling issued in March, Uber drivers are still able to choose when they work as well as to earn salaries from other gig employment but will be entitled to new benefits such as holiday pay and a retirement plan.
Uber's retirement plan for 70,000 U.K. drivers will be the first arrangement for gig workers in the U.K.
A spokesman for Uber confirmed that NOW: Pensions, the £2.5 billion ($3.4 billion) multiemployer defined contribution plan, was selected to manage the assets of the new arrangement sponsored by the ride-hailing service.
Under this arrangement, Uber will pay a contribution rate of 3%, while drivers will contribute 5% of their qualifying earnings if they earn above the minimum threshold of £120 and up to a maximum threshold of £967.
The employer and employee contribution rates are the minimum combined contribution rates every employer must offer to U.K. employees under the country's auto-enrollment program. Drivers will still be able to opt out.
Uber said it is also extending its plan to other operators such as Bolt, Addison Lee and Ola so drivers working across multiple online services will be able to contribute to Uber's plan in an effort to create a cross-industry retirement arrangement.
"We want to ensure that all eligible drivers can benefit no matter who they earn with, so today I am extending an invitation to work with operators such as Bolt, Addison Lee and Ola to create a cross-industry pension scheme," said Jamie Heywood, regional general manager of Northern and Eastern Europe for Uber, in a news release.
Stephen Timms, a member of Parliament and chairman of the Work and Pensions Select Committee, added in the news release: "I applaud this launch, following on from the recent court case. It extends company-supported pension saving to a large new cohort of workers, including many in my constituency. I also welcome Uber's call for a cross-sector approach to pension saving," Mr. Timms added.