Drivers will be auto-enrolled in a pension scheme provided by master trust Now Pensions, with Uber set to contribute 3 per cent of a driver’s earnings into the pot, and drivers contributing a minimum of 5 per cent of qualifying earnings. Payments will be backdated as far as 2017.
A landmark Supreme Court case in March ruled that Uber must classify its drivers as ‘workers’, therefore entitling them to be auto-enrolled into a pension scheme.
The scheme, managed by workplace solutions provider Adecco, will be available to drivers who earn upwards of £10,000 per year.
In May, GMB Union and Uber struck a deal to allow up to 70,000 Uber drivers to receive full union representation, while further commitments have been made to provide greater legal and workplace rights to more than 200,000 drivers working with other ride-hailing providers.
Mick Rix, GMB national officer, said: "Uber's pension scheme is a massive step in the right direction and will no doubt help thousands of drivers as they reach retirement age. GMB urges other platform-based operators to follow Uber's lead."
Cross-industry scheme
To maximise coverage under the scheme, Uber has invited other operators to create a cross-industry pension scheme. This could allow drivers to contribute to their pension pot whilst working across multiple apps.
Jamie Heywood, regional general manager of Northern and Eastern Europe at Uber, said the California-based tech giant wants to “ensure that all eligible drivers can benefit no matter who they earn with,” with invitations being sent to Bolt, Addison Lee and Ola.
Patrick Luthi, chief executive of Now Pensions, said: “This is a landmark step forward for this sector and we pledge our support to develop a cross-industry pension scheme.
"Furthermore, we want to help other industries provide their flexible workers with access to pensions as part of our mission to create a fair pension system for all."
Likewise, Alex Fleming, regional president of Northern Europe at Adecco, noted the scheme represents a significant milestone in the progress of the gig economy.
“As the UK labour market continues to be redefined as a result of the global pandemic, the need for equitable treatment and greater security is integral to building back better and supporting flexible workers.
"This is an industry first that not only paves the way in improving workers’ rights and protections but also contributes to sustainable futures for drivers,” he added.
A spokesperson for The Pensions Regulator said: “The gig economy is set to grow further as the UK emerges from the pandemic and businesses recover and it is only right that all workers contributing to the economy receive the pensions they are entitled to. We welcome innovative solutions by the industry which aim to give staff across the sector the opportunity to save for their retirement."
Stephen Timms, chairman of the Work and Pensions Select Committee, also applauded the launch of the scheme, as "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. The all-party Work and Pensions Select Committee has called on ministers for a timetable for its promised Employment Bill, to improve protections for all gig-economy workers,” he added.
Tom Higgins writes for FTAdviser's sister title Pensions Expert
