FREENOW UK becomes first in Europe to offer PHV drivers a choice of being workers or self-employed

Image credit: FREENOW

FREENOW have announced today it would be giving private hire vehicle (PHV) drivers in the UK the option to choose between worker status, gaining access to certain benefits, or remain independent contractors (self-employed from an employment law perspective) when it comes to their employment status.

The option will be available from October, and the decision was informed by an internal survey conducted this year among FREENOW minicab drivers. The survey revealed that while the majority would like to remain independent contractors (59%), almost a third (31%) would prefer to have worker status, while 10% are undecided.

The survey also revealed that holiday pay (71%) is the most sought-after benefit for minicab drivers.

Drivers on the FREENOW app will be able to freely choose their employment status. Those who choose worker status will be entitled to:

- National Living Wage guarantee - each week FREENOW will ensure all driver earnings are equal to or greater than the National Living Wage

Holiday pay - total earnings will be topped up by 12.07%, while drivers will retain the freedom to decide when and where to work without any restrictions

- Access to FREENOW’s pension scheme - FREENOW will contribute 3% towards the driver’s pension, based on drivers making a 5% contribution, and drivers will have the option to opt-out.

Meanwhile, drivers who decide to remain independent contractors will see high earnings per trip to compensate for the lack of other benefits (National Living Wage, holiday pay and pension). They will also have the right of substitution (to become a company owner employing other drivers) and will be able to select their dispatch radius. Ultimately, FREENOW commits to maintaining a comparable sum of earnings and benefits between all minicab drivers regardless of whether they have chosen the worker status or the independent contractor. All Private Hire Vehicle drivers will continue to be self-employed for tax purposes.

All taxi drivers at FREENOW will remain independent contractors in line with overwhelming driver preference (only 10% of taxi drivers preferred worker status) and higher independence thanks to their access to street-hailing and taxi ranks. FREENOW consulted individual taxi drivers as well as representative bodies before reaching this decision.

Mariusz Zabrocki, UK General Manager at FREENOW, said: “We always do the utmost for our drivers and we regularly listen to them. It’s now clear that minicab drivers in London want to have more than one option regarding their employment status. Therefore, we are taking an industry-first approach empowering the 20,000 minicab drivers on our platform to make the best choice for them. We’re also proud to be the first company to offer trade union protections to both workers and independent contractors.

“This development is the most recent in a long line of advantages we offer drivers, from support with EV transition to access to other benefits through our partners, including fuel cards, discounted vehicle rentals and discounted courses to prepare for TfL-required tests. At FREENOW we strive to provide a premier service for our drivers as well as passengers, and this is just another step towards achieving that goal.”