20/02/2021
Uber shares drop by 4%! UK Supreme Court ruling threatens the viability of the firm’s business model.
The court ruling implies that Uber drivers will be classed as workers rather than self-employed. The firm will therefore be forced to pay drivers a minimum wage, holiday pay, and compensate them for countless hours they spend logged on to the app waiting for people to book rides.
Wider implications include significant additional VAT expenses estimated at $1 billion, on top of liability. For drivers, this may mean a chance to end their financial difficulties and get labour rights in Uber’s system.
For Uber in Egypt, where the company cut 40% of its staff in the beginning of the pandemic, as compared to 17% worldwide, this may come as another major blow. Last year, fares were reduced by as much as 80%. This year, economic opportunities might be at risk.
If the firm is forced to lay off drivers, Uber rides may become more expensive and the company’s financial condition will be worsened.
Will the UK’s highest court’s ruling affect Egypt?