The government budget this week made significant changes to how national insurance contributions (NICs) are assessed for self employed workers. The government promised that the tax would be progressive and would have no impact on those earning less than £16,250. However, the reality is rather different.
Our analysis shows that drivers earning more than £6.12 per hour net will be materially worse off while those earning less will have some gains. UPHD driver earnings surveys show that almost 70% of Uber drivers earn less than the current national minimum wage. For the lucky few who are able to cross the national minimum wage threshold of £7.50 from April 1 will find they must pay an additional £68 in NIC. This comes on top of an additional £200 levied on drivers this year for mandatory English language tests at a time when earnings continue to decline while Uber increases its commission take and floods the market with over supply.
Budget 2017, on the other hand, has been a bonanza for the likes of Uber and Addison Lee, who were handed a 1% reduction in corporate taxes. But this only applued for the meatre profits these firms are prepared to allow on shore in the UK. (Addison Lee's parent in based in Luxembourg and Uber is based in the Netherlands).
There are two bitter twists in all of this for Uber drivers:
- at the exact same time as the Chancellor was delivering his budget speech in the House of Commons the Conservative Assembly Members in London voted against a motion proposed for the Mayor to make driver worker rights a condition of license for operators such as Uber.
- St. Barts NHS, through its supplier Cera, has decided to save public money by engaging Uber to transfer patients in clear violation of the NHS ethical procurement policy which prohibits the use of down stream supplier labour where worker rights are abused. The government, it seems, is prepared to exploit the exploited .
Much hope is invested in the Matthew Taylor review of the gig economy to redress the balance for the many workers, like Uber drivers, who are trapped in sham self employment. For now, this budget has cast private hire drivers further into the twilight of the gig economy with the government demanding more responsibility from drivers, failing to protect their worker rights while handing further awards to the likes of Uber and Addison Lee.