Uber Pledges to Provide Sharia-Compliant Pensions in the UK

Ride-hailing app operator Uber has said it is working with U.K. workplace pension provider NOW: Pensions to create a Sharia-compliant pension fund for its drivers.

Sharia-compliant investments are similar to sustainable or environmental, social, and governance investments, and prohibit pension funds from investing in companies involved in activities that break the tenets of Islam, which include the production and sale of alcohol, tobacco, armaments, and pork, as well as gambling operations and certain financial services.

“The vast majority of drivers participate in our current pension scheme, and we are working with our pension partner, NOW: Pensions, as they create a Sharia-compliant fund which will be available to drivers soon,” an Uber spokesperson said in an emailed statement. The company did not provide a timetable for when the option would be available.

The move comes amid a threat of legal action by the U.K.’s App Drivers and Couriers Union against Uber for not providing a Sharia-compliant pension option for its drivers. Lawyers for the ADCU say they had been stonewalled after writing to Uber to demand they make a Sharia-compliant pension provision for its drivers — up to 75% of whom it estimates are Muslim. [Source]

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Despite the pledge by Uber, ADCU President Yaseen Aslam says the company still hasn’t informed its drivers, and questions why Uber hired a pension provider in the first place that didn’t have Sharia-compliant pensions. In September, Uber announced that it would auto-enroll all eligible drivers into a pension plan to which it contributes 3% of earnings. [Source]

“Uber has 75% of a workforce who are Muslim, so they should have looked into this when they chose their pension providers,” Aslam says. “If there were no Sharia-compliant pension options available then that is a different story, but it was Uber who chose a pension provider who does not offer a Sharia pension.”

Aslam also says that Uber only agreed to provide a pension for its drivers after a six-year court battle that went all the way to the U.K.’s Supreme Court. And, he says, because a pension that is not Sharia compliant is unsuitable for its majority Muslim workforce, “it indirectly encourages them to opt out,” meaning that “if and when Uber does start offering the Sharia-compliant pension, many drivers have already opted out.”

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Tags: App Drivers and Couriers Union, Equality Act of 2010, Muslim, Pension, Pension Act 1988, Sharia, Uber, UK, Yaseen Aslam

Norway’s sovereign wealth fund’s investment portfolio lost 4.9% during the first quarter of 2022—equal to more than $71 billion—as its market value fell to $1.275 trillion, due to market volatility caused by political turmoil around the globe. [Source]

“The first quarter has been characterized by geopolitical turbulence, which has also affected the markets,” Norges Bank Investment Management Deputy CEO Trond Grande said in a statement. NBIM is the arm of the Norwegian central bank that operates the fund. “The return was negative for both equities and fixed income, but positive for unlisted real state.” [Source]

The fund’s equity investments declined 5.2% during the quarter, and its fixed-income investments provided no hedge, losing 4.8% for the period. Unlisted renewable energy infrastructure investments also weighed down the fund, dropping 3.3% during the first three months of the year. Unlisted real estate investments, the lone bright spot for the fund, gained 4.1% during the quarter; however, they only account for 2.7% of the portfolio.

The fund said the krone strengthened against several major currencies during the quarter, and that currency movements contributed to a 171 billion kroner decrease in the fund’s value, while inflow into the fund totaled 141 billion kroner. As of March 31, 70.9% of the fund was invested in equities, 26.3% in fixed income, 2.7% in unlisted real estate, and 0.1% in unlisted renewable energy infrastructure.

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Despite the rough quarter, the fund managed to beat its benchmark index’s return by 0.66 percentage points, or 82 billion kroner. The fund’s investments are measured against a benchmark index set by Norway’s Ministry of Finance on the basis of FTSE Group indices and Bloomberg Fixed Income indices.

The results for the quarter were a sharp U-turn from the previous quarter, when the fund returned 4.59%, as well as from the quarter a year ago when the fund returned 4.02%. As of the end of March, the fund had annualized returns of 8.41% over the past 10 years, and 6.33% since its inception at the beginning of 1998.

The fund giant owns equity stakes in more than 9,000 companies worldwide, and on average, holds approximately 1.3% of all listed companies in the world. Meanwhile, its fixed-income investments are allocated bonds issued by governments and related institutions and securities issued by companies. Up to 30% of the fund can be invested in fixed income.