By Christiana Sciaudone
Investing.com -- Uber (NYSE:UBER) slipped after saying its U.K. drivers will be treated as workers -- not quite employees, mind you, but workers -- starting Wednesday.
Some 70,000 private-hire drivers will be classified as self-employed workers for tax purposes, but entitled to a minimum wage, holiday pay and a pension, according to The New York Times. Shares are down almost 4%.
Uber's move was prompted after it lost a legal battle last month, when Britain's Supreme Court said its workers deserved those rights. The ride-hailing giant and other gig economy companies are facing conflicts across Europe over their classification and subsequent treatment of the people who work for them.
Uber forecast no change in near-term earnings, but the company has yet to make money, and this could add yet another roadblock to profitability. The U.K. mobility business represented about 6.4% of global mobility gross bookings in the fourth quarter of 2020, the company said in a statement.
In California, Uber had faced a similar conflict, but escaped when a proposition passed in November allowed them to continue to consider drivers as independent contractors.
Uber said that 99% of its U.K. drivers already earn more than the National Living Wage, as the minimum wage in the country is known, with earnings of about 17 pounds an hour ($23.58) in London and 14 pounds elsewhere, after expenses.
The National Living Wage will be 8.91 pounds starting April 1, according to the UK government.
U.K. drivers will be paid holiday time based on 12.07% of their earnings, paid out every two weeks, while eligible drivers will automatically be enrolled into a pension plan with contributions from Uber.