A British judge’s ruling that Uber taxi drivers are employees will cost the technology company $ 600 million in the first quarter. According to the country’s highest court, a group of drivers who have traveled through the United Kingdom in the past are still entitled to the minimum wage and vacation pay. To resolve claims from drivers from the past, Uber expects significant losses.
The UK Supreme Court ruling in February has sparked uncertainty affecting key players in the stage economy. Companies like Uber benefit from self-employed people providing services through their sites, but these individuals are suddenly more expensive if they get employee rights.
Uber revealed a setback in its first quarter results. In an explanation to analysts, CEO Tara Kosroshahi sought to address concerns about future costs as much as possible due to legal setbacks.
Sales and net income reported in the last quarter weighed in at hundreds of millions of dollars, but this was mainly paper loss. Uber handled 24 percent more orders in the first quarter than in the previous twelve months. This is mainly due to the strong growth of the food supply segment. Locks around the world continue to weigh on the number of taxi rides ordered via Uber, up 38 percent from a year earlier.
Uber’s first-quarter revenue was $ 2.9 billion, down 11 percent from a year earlier. After $ 108 million, the net loss was much smaller than the $ 2.9 billion deficit in the first three months of 2020. This is mainly from the sale of Uber’s self-driving car division. Adjusted operating income, excluding this one fall, was negative at 9,359 million.
Uber has never made a quarterly profit since its IPO in 2019. But the company is now confident of making a profit by the end of this year, the summit stressed in a commentary.
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