Uber strikes landmark deal on worker rights and pay with Transport union

Uber’s global chief executive has heralded a landmark agreement the ridesharing giant has struck with one of its fiercest critics, Australia’s Transport Workers Union, in a major compromise that will frame the future of the gig economy.

In remarks made exclusively to The Sydney Morning Herald and The Age, Uber CEO Dara Khosrowshahi hailed the agreement, which binds the US company to back more regulation requiring the industry to give drivers and couriers a form of minimum wage and rights to appeal dismissals.

After years of animosity, executives from Uber and officials from the TWU put on a display of bonhomie in Sydney on Tuesday. From left, union assistant secretary Nick McIntosh, Uber Australia boss Dom Taylor, Uber Eats’ local head Bec Nyst, and union national secretary Michael Kaine.Credit: Jessica Hromas

“This deal is about raising up the voice of independent workers and focusing on what they say is most important to them: flexibility and control over when and where they work, earning a fair wage, and access to benefits and protections,” said Khosrowshahi, who has tried to rehabilitate Uber’s image after the pugilistic reign of his founding predecessor, Travis Kalanick.

"While there is no one-size-fits-all solution, we believe the best way to achieve [flexibility and benefits for riders] is to collaborate with governments, regulators and unions across the globe," he said.

Gig economy contractors have no right to a minimum wage, unfair dismissal protection, workers' compensation for injuries, or employer superannuation payments under Australian law. For years the Transport Workers Union has railed against that in the press, via high-profile court cases, and protests in capital cities.

It now has a powerful ally in Canberra, where federal workplace relations minister Tony Burke has committed to let the Fair Work Commission give gig economy workers similar rights to the rest of the workforce.

Uber's Australian boss Dom Taylor denied the company was only backing change now that it has a regulatory gun to its head or that the agreement is an admission Uber had undercut Australia's labour market since it arrived here about a decade ago.

He said Uber, which has more than 100,000 people on its books, had been in talks for months with the union and its workers, who valued the flexibility of being contractors very highly in surveys and discussions.

"There's been an industrial relations system where there's been this dichotomy between contractor and employee, which has effectively created this trade off" between flexibility and benefits, Taylor said. "And we're now saying we can retain that flexibility but we... can also add on top of that earnings, so benefits and guarantees and safety nets to enhance the security."

Uber chief executive Dara Khosrowshahi is a more moderate face for the company, which endured so much turbulence under founder Travis Khalanick’s tenure that it was made into a TV series. Credit: AP

Uber’s decision to make a pact with the TWU, following a similar but less extensive agreement between the union and DoorDash and employee trials by Menulog, will put pressure on other gig economy companies to go along with regulation that the Herald and The Age first revealed Labor planned to legislate after a spate of deaths.

Uber figures shown to this masthead state that for the six weeks to May 30, Uber drivers across Australia received an average of $38 an hour before costs while delivery couriers earn an average of $27.50 per hour online before costs. Both figures are much higher than basic industry minimum wages though costs can take out a substantial portion of workers’ earnings, especially with high petrol prices.

The compact between the union and Uber, signed on Tuesday in Sydney where the two sides posed for photos, only includes broad principles and an agreement on future talks. But it commits both sides to backing minimum earnings on a "cost recovery" basis, suggesting the industry minimum could be no higher than covering what gig economy staff spend to work.

Transport Workers Union national secretary Michael Kaine said the same language had been used in systems that worked for owner driver couriers in NSW. They will receive $31.84 an hour for driving light vehicles from July 1 under a state industrial tribunal ruling. He rejected fears the deal would restrict companies like Uber from offering a convenient service to consumers by burying them in red tape.

"When everyone's playing by the same rules," Kaine said. "You can have a sustainable industry."

But he would not rule out further lawsuits against Uber if his members demanded.

The new core principles agreed by Uber and the TWU

The TWU and Uber support the federal government legislating for an independent body, or a stream of an independent body, specific to platform work and comprised of industry experts, with the capacity to:

1. Set minimum and transparent enforceable earnings and benefits/conditions for platform workers based on the principle of cost recovery, taking into account the nature of the work.

2. Facilitate a cost effective and efficient mechanism to resolve disputes such as deactivation of relevant platform worker accounts. Any dispute resolution mechanism must be fit for purpose for platform work.

3. Ensure the rights of platform workers to join and be represented by the relevant Registered Organisation [union] are respected and that platform workers have an effective collective voice.

4. Ensure that appropriate enforcement exists to meet these standards and objectives.