Uber Will Increase London Fares to Raise a $260 Million Clean Energy Fund

(Bloomberg) -- Uber Technologies Inc. will increase the cost of taking a ride in London by 15 pence (20 cents) per mile to create a 200 million pound ($260 million) fund to help drivers switch to all-electric vehicles.

The announcement comes days before Uber heads to a London court to appeal a court ruling that its drivers should be entitled to benefits, including overtime and paid vacation.

In a briefing with journalists in London Tuesday, Uber Chief Executive Officer Dara Khosrowshahi said the money “would not accrue to the benefit of Uber,” but be put in individual savings account for each driver.

Khosrowshahi was also asked about his decision not to attend Saudi Arabia's “Davos in the Desert” event. "We pulled out of the conference because we were deeply worried about the news we were reading," he said. "Having pulled out we're now in a position to wait and understand what happened."

Read More: Uber's Top Dealmaker Departs Ahead of Next Year's Planned IPO

Uber's new fund is part of its plan to only have EVs on London's roads by 2025. But the availability of affordable EVs remains a challenge for the company and its all-electric ambition, Khosrowshahi said, adding that Uber is in discussions with manufacturers to provide electric vehicles, and is also working with charging companies such as BP Plc's Chargemaster.

Uber was in early talks to buy food-delivery company Deliveroo for several billion dollars, Bloomberg reported in September.

"Is something going to happen with Deliveroo and Uber, who knows," said Khosrowshahi. "But at this point the focus is on organic expansion. I don't want to comment on specifically who, but we are constantly talking to any and every player out there.”

Jamie Heywood, Uber's European boss, said an average driver working 40 hours a week over three years “could expect to save 4,500 pounds on the cost of an EV.”

He said that when a driver upgrades to an electric vehicle using that fund, “they're completely free to work whenever and wherever,” adding that “there are no obligations” to use the vehicle for only Uber journeys.

If a driver stops working for the company before taking advantage of the fund, the money will be spent on other clean air initiatives. “We're not going to bank it,” Khosrowshahi said.

Uber is set to appeal a court ruling that its drivers should be entitled to benefits, including overtime and paid vacation. The court is expected to hear Uber's arguments on Oct. 30.

Top U.K. judges ruled in June that London-based Pimlico Plumbers Ltd. should've treated one of its tradesmen as a “worker,” giving him the right to vacation pay and to sue the company. And in May, taxi service Addison Lee Ltd. lost an appeal over whether drivers were independent contractors or employees with rights to benefits.

"I think it's a concern, sure. We have to take these things seriously," said Khosrowshahi. "But I think how our platform is structured is quite different to Pimlico Plumbers, and I hope that comes out in court appropriately."

To contact the reporter on this story: Nate Lanxon in London at nlanxon@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly Schuetz

©2018 Bloomberg L.P.