London (CNN Business)Uber has recognized a labor union for the first time in a move that could boost efforts by gig economy workers to win better employment rights.
GMB, one of Britain’s largest unions, will now be able to represent up to 70,000 drivers across the United Kingdom — one of Uber’s most important international markets — according to a joint statement from the union and the company.
“This groundbreaking deal between GMB and Uber could be the first step to a fairer working life for millions of people,” said GMB’s national officer Mick Rix. “We now call on all other operators to follow suit,” Rix added.
Uber (UBER) is the only major private taxi operator to offer these protections, according to GMB, which could give it an advantage over other app-based services such as Bolt and Ola by making it a more attractive employer. British union Unite represents London’s Black Cab drivers.
“Whilst Uber and GMB may not seem like obvious allies, we’ve always agreed that drivers must come first, and today we have struck this important deal to improve workers’ protections,” said Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe.
The move to recognize the union comes after Uber reclassified its drivers as “workers” under UK employment law in March, giving them greater protections and entitling them to the minimum wage, paid vacation time and a pension.
That decision followed a UK Supreme Court ruling that Uber drivers should be classified as workers and not independent contractors. Uber said earlier this month that it has set aside $600 million to deal with these changes, which do not apply to Uber Eats riders and drivers.
The unionization agreement “will give significant influencing power to GMB and strike a cultural chord change” in how Uber interacts with its workers, according to Rebecca Thornley-Gibson, a partner at London law firm DMH Stallard.
“The GMB as the recognized union will need to be consulted with in respect of employment matters where collective consultation is required such as mass redundancy proposals,” she told CNN Business.
“What a collective agreement does not necessarily do, however, is allow the union to force negotiations to continue until an agreement is reached. Uber are still likely to be able to make their decisions once they have exhausted discussions,” she added.
The agreement could increase pressure on Uber elsewhere in Europe and in the United States, where the company is facing mounting challenges to the way it classifies and treats its drivers.
On an earnings call earlier this month, chief legal officer Tony West acknowledged that Uber is actively engaging with officials across Europe on labor issues.
In the United States, a ballot measure approved by California voters that exempts firms such as Uber and Lyft from classifying their drivers in the state as employees, rather than independent contractors, is facing a legal challenge.
And new legislation creating collective bargaining rights for gig economy workers is poised to be introduced in New York in the coming weeks, according to a Bloomberg report that cites the president of the Transport Workers Union.
— Julia Horowitz contributed reporting.