Uber is to give its UK drivers a minimum wage, paid holiday and an automatic pension plan from Wednesday, the firm has announced.
It follows Uber's legal loss in the Supreme Court last month, after judges ruled the company's drivers should be classed as workers, not independent third-party contractors.Lawyers at the time said the ruling meant drivers would be entitled to basic rights, such as paid holiday, and hailed the decision as having significant impact for the gig economy.
On Tuesday night, Uber said its 70,000 drivers would be treated as workers and have an "earnings floor, not an earnings ceiling".
Jamie Heywood, Uber regional general manager for Northern and Eastern Europe, said: "This is an important day for drivers in the UK.
"Uber drivers will receive an earnings guarantee, holiday pay and a pension, and will retain the flexibility they currently value.
"Uber is just one part of a larger private-hire industry, so we hope that all other operators will join us in improving the quality of work for these important workers who are an essential part of our everyday lives."
Union GMB welcomed the news, saying the company had "finally done the right thing after losing four court battles".
Mick Rix, GMB national officer, said: "It’s a shame it took GMB winning four court battles to make them see sense, but we got there in the end and ultimately that’s a big win for our members.
"GMB has consistently said we are willing to speak face to face to Uber about its treatment of drivers – our door remains open.
"Other gig economy companies should take note – this is the end of the road for bogus self-employment."
Business Secretary Kwasi Kwarteng said the ruling that Uber drivers in the UK should be guaranteed minimum wage, holiday pay and pensions was to be “welcomed”.
Speaking to Sky News on Wednesday, the Cabinet minister said: “Absolutely to be welcomed.
“I’ve always said that the new phase of our economy should be about protecting workers’ rights, driving higher standards and driving new technologies.
“And I think that the Government’s record on things like the national living wage that we introduced has been very good and we want to see a well paid workforce with strong worker protections, driving innovation and economic progress and I think that is something we can achieve.”
Under the changes, the company said all its drivers would be paid holiday time based on 12.07% of their earnings, on a fortnightly basis.
A pension scheme will also be established, which all eligible drivers will be automatically enrolled on - with contributions both from Uber and from workers.
A statement from the firm said: "This means drivers will earn with greater security, helping them to plan for their futures while maintaining the flexibility that is integral to the private-hire industry.
"Uber has consulted thousands of drivers over the last several weeks, who said they wanted these additional benefits but without any loss of flexibility."