Uber to Raise Prices by 40% in Europe
Uber, the ride-hailing and delivery service, has warned that the European Union's new directive on the status of self-employed individuals will lead to the suspension of its services in hundreds of cities and a 40% increase in Uber prices. This information comes from Yahoo! Finance.
According to the proposed legislation, taxi drivers and couriers will effectively become employees with rights and benefits such as a guaranteed minimum wage and the ability to take childcare leave.
"If Brussels forces Uber to change the status of drivers and couriers across the EU, we can expect a reduction in the number of jobs by 50-70%," said Annabel Dias, the head of Uber's European division. This will result in Uber ceasing operations in hundreds of cities out of the 3,000 across the EU and increasing its service prices, she added.
Uber also stated that the new EU regulations could lead to significantly longer wait times for customers due to a shortage of drivers. Dias mentioned that to manage labor costs, Uber will need to consolidate working hours for fewer employees. Drivers and couriers will also be required to accept all orders regularly, without the option to choose, and adhere to a set work schedule. They will no longer be able to work simultaneously with other similar services.
Despite these potential challenges, Dias does not expect these rules to impact Uber's profitability in Europe. She noted that the company has already demonstrated its ability to grow in countries like Germany and Spain by using a third-party employment model. In Germany, for instance, Uber contracts with fleet management companies, resulting in higher prices and services being offered only in major cities.
Currently, EU lawmakers are discussing the final text of the Platform Work Directive, which aims to improve working conditions for gig workers. Most platform workers in the EU are categorized as self-employed, meaning they do not have access to labor rights and benefits.
Dias called on lawmakers to adopt rules that preserve the desire for self-employment flexibility. She emphasized that any changes should consider the unique nature of gig work and the flexibility it offers to those who choose it.