Uber reveals UK revenue of $983 million as business model change follows court ruling

The importance of Uber’s battle for a place in London’s competitive taxi and private hire market was highlighted as the US company reported the first positive quarterly cashflow in its history on Tuesday.

As part of its latest update for investors, the ride-hailing app said a “change in the business model for our UK Mobility business” contributed to a “$983 million revenue benefit” which came after a court ruling that the company was the official transportation provider to its users, rather than a middle man taking a cut from fares. The change means the company can book the entirety of fares charged in the UK there as its revenue.

Uber’s Mobility business was formerly known as Uber Rides, and includes its core ride-hailing service. London is by far the company’s biggest market in the UK and one of its biggest globally outside the US.

Uber also said the $983 million included “an accrual made for the resolution of historical claims in the UK relating to the classification of drivers.”

There was also a court ruling that Uber drivers should be classed as self-employed, meaning -- which means drivers are entitled to to paid time off , the minimum wage and pensions -- Uber argued that any payments due after the ruling could be backdated by only two years, citing UK employment rules introduced in 2015 to limit the size of claims faced by businesses.

It is not the first controversy the company has faced in the capital, where it was denied a licence in 2019, but received  a two-and-a-half year licence to operate its private hire vehicles following  a lengthy legal battle with Transport for London. 

The ride-hailing and delivery app made more trips globally than before the pandemic in its second quater, helping it report free cashflow of $382 million for the second quarter, ahead of City and Wall Street forecasts of around $263 million as recovering demand tracked the return of tourist and commuter traffic around the world.

Within its second-quarter results, Uber revealed an increase of almost a third in the number of drivers and delivery staff on its global books, to a record high of five million , in a sign that rising fuel prices and the terms it offers are not stopping people from signing up for the firm, even as they often have no specified hours and pay their own vehicle overheads.

Every UK driver now receives holiday pay and a pension.