UK ruling unlikely to impact Uber Mideast drivers

UK ruling unlikely to impact Uber Mideast drivers
Uber driver and president of the (ADCU), App Drivers & Couriers Union, Yaseen Islam poses with a poster outside the Supreme Court in London on Feb. 19, 2021. (AP Photo/Frank Augstein)
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Updated 22 February 2021

UK ruling unlikely to impact Uber Mideast drivers

UK ruling unlikely to impact Uber Mideast drivers
  • Ride-hailing service in KSA already heavily regulated, with only Saudis allowed to drive

DUBAI: A high-profile court ruling in the UK that Uber drivers are entitled to employment benefits such as paid holidays and sick pay is unlikely to have any significant impact in Gulf Cooperation Council (GCC) member states as the ride-hailing sector in the region is already highly regulated.

The Supreme Court decision declared that British drivers for Uber should be classed as workers, not self-employed.

The ruling rejected Uber’s appeal on an employment tribunal ruling brought by two of its drivers in 2016.

Joe Aiston, a London-based senior associate at law firm Taylor Wessing, told Reuters that the ruling could act as a reference for courts and regulators outside the UK.

But this is unlikely to have a major impact on Uber drivers in the Middle East as the sector is already heavily regulated, and in Saudi Arabia it was recently declared that only its citizens could work for services such as Uber.

“Within the context of the UAE and the KSA, the Supreme Court UK decision has no impact on the status of Uber and Careem drivers in the Middle East. The UK is a separate common law system with its own regulations entirely separate and distinct from the systems in the Middle East,” Sara Khoja, UAE-based partner and co-head of employment for the Middle East and Africa at law firm Clyde & Co, told Arab News.

“In the UAE, the key status for an individual is sponsorship to work and reside. It is however, interesting that in the Middle East, the governments in the UAE and KSA have moved in the direction of providing more flexible work models for individuals such as freelancing. With the strive to create a technology hub and an SME culture, we anticipate that there may be more models for flexible working in the coming years in this region. From a legal perspective, it is a balance between individuals having flexibility and freedom to contract and strict employment frameworks.”

The company’s Middle East spokespeople did not respond to an Arab News request for comment on its operations in the region.

Instead, they referred to the global statement issued by Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe.

“We respect the court’s decision which focused on a small number of drivers who used the Uber app in 2016,” he said.

“Since then, we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury,” he added.

“We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see.”

FASTFACTS

• 16 companies are licensed to operate ride-hailing services in the Kingdom.

• Around 800,000 drivers are registered, 250,000 are said to be actively driving in Saudi Arabia.

• Over the past three years, 300 million trips were carried out using ride-hailing services in the Kingdom, earning drivers around SR6 billion ($1.6 billion).

• Saudi Uber drivers generally own their own cars, with the company taking 20-30 percent commission for each ride.

The crux of the legal debate in the UK came down to whether Uber drivers should be classed as self-employed, workers or employees.

In the UK, a worker is classed as an intermediate status between self-employed and employee, with certain benefits and entitlements such as a contract, minimum wage and paid holidays.

At present, no Uber driver in the Middle East is considered an employee of the company, and is paid on a commission basis.

“You’re the boss. You can drive with the Uber app day or night. Fit driving around your life, not the other way around. Make money on your terms,” Uber says on the UAE and Saudi driver homepage of its website.

“The more you drive, the more money you can make. When demand is higher than normal, you can make even more.”

A recent survey commissioned by Uber in the UK found that 89 percent of drivers said flexibility was the most important reason they chose to drive using the app.

A majority of drivers surveyed would rather retain the right to set their own hours, even if the alternative was 20 percent higher pay.

In Saudi Arabia, the ride-hailing industry is already highly regulated. Last month, the Ministry of Transport and the Public Transport Authority (PTA) announced that only Saudi nationals are allowed to drive for services such as Uber and its main rival Careem, which was itself bought by Uber in a $3 billion deal last year.

The PTA said 16 companies are licensed to operate ride-hailing services in the Kingdom, and do so in 60 cities nationwide. While around 800,000 drivers are registered, 250,000 are said to be actively driving.

Mueed Al-Saeed, an assistant vice president at the PTA, told Al-Ekhbariya TV that over the past three years, 300 million trips were carried out using ride-hailing services in the Kingdom, earning drivers around SR6 billion ($1.6 billion).

Transport Minister Saleh Al-Jasser announced in January a series of initiatives to encourage more Saudis to become drivers, including an agreement with the Social Development Bank to provide drivers with funding to purchase their own private vehicles.

Saudi Uber drivers generally own their own cars, with the company taking 20-30 percent commission for each ride, a former driver told Arab News.

But occasionally Uber offered incentives for drivers to work more and reduced the commission to 10 percent, he added.

In the UAE, the situation is a bit different as only Emirati drivers are allowed to drive their own private vehicles, and expat drivers are generally direct employees of fleet or taxi companies.

But it is unclear if the fleet drivers work for a flat salary for the company that provides their employment visa, or whether commission on the Uber rides goes to the driver or the company.

Uber has direct links to Saudi Arabia through its sovereign wealth fund, the Public Investment Fund (PIF), which first invested $3.5 billion in the company in 2016.

Earlier this month, as part of its Q4 2020 regulatory filing in the US, the PIF’s stake in Uber was valued at $3.71 billion, representing 29 percent of its total portfolio of investments in the country.


Saudi MoF closes April domestic sukuk issuance worth $3.1bn

Saudi MoF closes April domestic sukuk issuance worth $3.1bn
Updated 37 min 14 sec ago

Saudi MoF closes April domestic sukuk issuance worth $3.1bn

Saudi MoF closes April domestic sukuk issuance worth $3.1bn
  • Gulf states tap bond markets to help fund budgets
  • Latest sukuk sale divided into two tranches

RIYADH: The Saudi Ministry of Finance’s National Debt Management Center (NDMC) has closed the April 2021 issuance under the government’s riyal-denominated sukuk program.
The issuance size was set at SR11.713 billion ($3.1 billion), NDMC said in a filing on Wednesday.
The sukuk issuances were divided into two tranches — the first at SR3.889 billion ($1 billion), matures in 2028 and the second at SR7.824 billion ($2 billion), matures in 2031.
Gulf states are tapping bond markets to raise fresh funds as traditional revenue sources such as crude oil sales come under pressure as a result of the coronavirus pandemic.


Saudi Tadawul Group said to narrow banks for IPO process

Saudi Tadawul Group said to narrow banks for IPO process
Updated 21 April 2021

Saudi Tadawul Group said to narrow banks for IPO process

Saudi Tadawul Group said to narrow banks for IPO process
  • Received proposals from 10 firms
  • The group will have four subsidiaries

DUBAI: Saudi Tadawul Group has short-listed three local and three foreign banks for potential advisory roles in the financial market company’s upcoming initial public offering (IPO), three sources said.
Citigroup, JPMorgan and Morgan Stanley were chosen, along with the securities unit of Saudi National Bank, Saudi Fransi Capital and HSBC Saudi Arabia, the sources said.
Tadawul, the kingdom’s bourse operator, is expected to chose one local bank and potentially one or two international banks for its listing, they said. A final round of pitching for roles is taking place this week, they added.
Tadawul did not immediately respond to a request for comment when contacted by Reuters on Wednesday. Citigroup, JPMorgan, Morgan Stanley and HSBC declined to comment. The units of Saudi National Bank and Saudi Fransi Capital were not immediately available for comment.
Tadawul said earlier this month it had received proposals from 10 local and international firms for the advisory roles.
Saudi Arabia’s stock exchange has converted itself into a holding company and will be renamed Saudi Tadawul Group ahead of the listing this year, Group Chief Executive Khalid Al-Hussan said previously.
The group will have four subsidiaries — its bourse Saudi Exchange, securities clearing and depository businesses and technology services.


Abu Dhabi said to weigh sale of $4bn Taqa stake

Abu Dhabi said to weigh sale of $4bn Taqa stake
Updated 21 April 2021

Abu Dhabi said to weigh sale of $4bn Taqa stake

Abu Dhabi said to weigh sale of $4bn Taqa stake
  • Size of potential stake could change
  • Abu Dhabi seeking to attract FDI

RIYADH: Abu Dhabi is working with an adviser as it considers selling about 10 percent of Abu Dhabi National Energy Co. (TAQA), Bloomberg reported citing people familiar with the matter.
The stake in the company could be worth more than $4 billion based on its current market price.
Initial non-binding bids are expected to be submitted in May, according to the people.
The size of the Taqa stake being sold could change depending on investor interest, Bloomberg reported. Deliberations are ongoing, and there’s no certainty they will lead to a transaction, it said.
Last year, Abu Dhabi orchestrated a plan for Taqa to receive assets from state-owned holding company Abu Dhabi Power Corp., known as ADPower, in return for stock.
Abu Dhabi has been seeking to attract foreign capital by selling stakes in some of its largest companies.


Emirates may need to raise cash if air travel does not pick up

Emirates may need to raise cash if air travel does not pick up
Updated 21 April 2021

Emirates may need to raise cash if air travel does not pick up

Emirates may need to raise cash if air travel does not pick up
  • Emirates has resumed flights with all of its 151 Boeing 777 jets
  • Emirates lost 12.6 billion dirhams in the first half of the year

DUBAI: Emirates may need to raise more cash this year, possibly through another equity injection from the Dubai government, if demand for air travel does not pick up soon, its president said on Wednesday.
The state carrier had hoped the global vaccine rollout would renew confidence in air travel but demand remains at very low levels, leaving many airlines to ground planes or fly them near-empty.
“We are good for another six, seven or eight months in terms of cash. We have sufficient cash coming in to be able to keep the day-to-day operation at a neutral basis,” Tim Clark told the online World Aviation Festival.
“But like everybody else, if in six months global demand is where it is today then we are all going to face difficulties. Not just Emirates“
Emirates, which lost 12.6 billion dirhams ($3.4 billion) in the first half of the year, got $2 billion in equity in 2020 from the Dubai government, its sole shareholder.
The airline would make a recommendation to the government on raising cash, Clark said without saying exactly when that would be done.
The recommendation could be for equity injection, or for the airline to raise debt or to take other measures, he said without specifying.
“The balance sheet is pretty strong regardless of what has happened.”
The cash situation, however, could be turned around by September-October as long as demand picks up, Clark said, adding that he hoped the airline would not have to seek cash.
Emirates has resumed flights with all of its 151 Boeing 777 jets which are mainly carrying cargo, with about 20,000 to 30,000 passengers a day.
Clark said the airline could retain some of its older 777 passenger jets that are due to retire and instead convert them into cargo-only planes as freight demand remains high.
He said that he expected there would be demand for business class travel post-pandemic even if corporate travel does diminish through executives opting to hold meetings online instead of traveling.
Demand would likely be supported by cheaper fares to fill business class seats if corporate travel does not rebound, he said.
Clark, who was due to retire last year, said he wanted to set the airline on its future course before he retires, but added he no longer knew when that would be.


Football 1 Super League 0: Gulf fans rejoice as shares fall

Football 1 Super League 0: Gulf fans rejoice as shares fall
Updated 21 April 2021

Football 1 Super League 0: Gulf fans rejoice as shares fall

Football 1 Super League 0: Gulf fans rejoice as shares fall
  • Shares in publicly traded Manchester United and Juventus fell on the news as the prospect of a multi-billion dollar pay day for the breakaway clubs was drowned out

DUBAI: Shares in European football clubs fell after plans for a European super league lay in tatters following a global fan backlash.
In what must rank among the most extraordinary 48 hours in the history of the modern game, 12 of the continent’s most powerful clubs attempted to create a brand new elite league before its would-be founding members began to break ranks one by one.
By early Wednesday all six Premier League teams linked to the project had withdrawn.
Gulf-based football fans rejoiced at the news on supporter club social media.
“We stand firmly behind all supporters groups calling for the ESL to be scrapped,” tweeted the Dubai Reds, the official Liverpool supporters club in the emirate.


Shares in publicly traded Manchester United and Juventus fell on the news as the prospect of a multi-billion dollar pay day for the breakaway clubs was drowned out by a global outcry that appeared to unite fans, pundits and even some of the managers of the clubs involved.
US investment bank JP Morgan had planned to finance the new league, providing a €3.5 billion ($4.2 billion) grant for the founding clubs to help recover from the impact of the COVID-19 pandemic which has drained revenue from clubs worldwide, Reuters reported.
The collapse of the project has exposed the sometimes bitter rifts between the fans and owners of some of Europe’s biggest clubs. It also leaves a potential legal mess behind as withdrawing clubs risk being sued, the Telegraph reported on Tuesday.
Juventus chairman Andrea Agnelli said that the league could no longer go ahead after six English clubs withdrew.

The founding members of the league were English clubs Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur, Italy’s Juventus, Inter and AC Milan, and Spain’s Real Madrid, Barcelona and Atletico.