Uber driver tells UK tribunal he earned less than the minimum wage

[July 20, 2016]  By Costas Pitas

LONDON (Reuters) - An Uber [UBER.UL] driver told a British tribunal on Wednesday he had earned less than the minimum wage, despite the firm saying he received nearly three times as much, in a case that could threaten the app's business model.

Lawyers are representing two drivers at an employment tribunal, arguing that Uber is acting unlawfully by not offering rights such as holiday and sick pay.

Uber, which allows users to book and pay for a taxi by smartphone, says its more than 30,000 London drivers enjoy the flexibility of being able to work when they choose and receive on average much more than the minimum wage.

The case could hit Uber's reliance on using self-employed drivers.

James Farrar, a driver with the firm since December 2014, said that last August he earned less than the 6.70 pounds ($8.80) an hour for those aged 21 and older which was then the rate for the minimum wage in Britain.

"They claim that, based on the total number of hours logged into the app, I have been paid 13.77 pounds on an average hourly basis," he wrote in a witness statement.

"I calculated my net earnings for August 2015 after the expenses I set off and they came to 5.03 pounds an hour."

Uber's lawyer David Reade said that Farrar had picked a month in which he had logged onto the app for the longest period of time but canceled or not accepted the most amount of jobs, thereby reducing his hourly pay.

Most employees in Britain are entitled to the minimum wage but the self-employed are among those who do not qualify.

The issue of low pay and a lack of job security has sparked a public outcry in Britain in recent years with firms such as sports retailer Sports Direct facing a backlash over their use of zero-hour contracts.

An Uber representative registers people on his smartphone during the kick off of a citywide jobs tour in the Queens borough of New York July 21, 2015. REUTERS/Shannon Stapleton

Last year Uber, whose investors include Goldman Sachs and Alphabet Inc unit Google, said its drivers received average payments of 16 pounds an hour in October after the firm's service fee.

The former start-up has grown rapidly and is valued at $62.5 billion but has faced protests, bans and restrictions in several cities, including in London where traditional black-cab drivers tried to have the app ruled illegal.

The case is due to last until next Tuesday and a decision on whether Uber is acting unlawfully is unlikely to be given by the judge for several weeks.

(Editing by Stephen Addison)

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