Following a UK Supreme Court defeat last month, the Silicon Valley-based company on Wednesday (March 17) reclassified more than 70,000 drivers in Britain as workers, meaning they are guaranteed entitlements such as holiday pay.
Drivers should now receive the minimum wage for the whole time they are logged on to the Uber app, a major victory for unions.
Uber regional general manager for northern and eastern Europe, Jamie Heywood, told the BBC: "Today is an important day for all drivers in the UK. Any driver who earns on the Uber platform will be able to be paid for holiday time. They'll be enrolled in a pension, and they'll be able to earn at least a national living wage as a floor and not a ceiling."
Uber Technologies Inc has pushed back against European and U.S. labor advocates' demands for better driver compensation with some success, calling for a "third way" of combining flexible on-demand work with more limited benefits than traditional employees receive.
The agreement in Britain classifies Uber drivers as workers who are entitled to fewer rights than those classed as employees, who are also guaranteed sick pay and parental leave. Uber in California last year pushed and won a similar compromise on drivers' status.