The move comes after the business lost a Supreme Court case last month, which found that Uber was wrong to class its drivers as independent contractors and should instead treat them as employees.

Uber has said that all of its drivers will now be paid at least the national living wage, irrespective of the driver’s age, while drivers will also enjoy holiday time based on 12.07% of their earnings. This will be paid out on a fortnightly basis.

Drivers will also be automatically enrolled into a workplace pension scheme, with Uber contributing to the pension pot alongside driver contributions.

Crucially, drivers will still enjoy the freedom to choose when they want to work, and what jobs to select.

It’s believed that around 70,000 Uber drivers will benefit from the changes.

Jamie Heywood, regional general manager for northern Europe, called on other firms in the gig economy to follow suit and treat their workers in the same way.

He told the BBC: “Drivers have consistently told us that they wanted both the flexibility that we provided but also they wanted the benefits and we’ve been struggling to find a way of bringing those two together in a way that work for us and work for drivers.”

End of the road for ‘bogus’ self-employment

The GMB union, which represents Uber drivers, welcomed the move and said that it should spell the end for businesses attempting to get out of delivering such benefits by falsely claiming that staff are self-employed.

Mick Rix, national officer at GMB, said that Uber had to be “dragged kicking and screaming to do the right thing” but had finally accepted the ruling of the courts.

He continued: ““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.”

Working enough hours

It appears there will be further debate ahead though over precisely what some Uber drivers receive however. 

Kate Smith, head of pensions at Aegon, noted that what Uber deems as the drivers’ working hours will have important ramifications for whether drivers meet the minimum income threshold needed in order to be enrolled into a pension.

She continued: “Based on the new national living wage from April of £8.91 an hour, an Uber driver would need to be paid for at least 22 hours a week to earn the £10,000 a year threshold for being auto-enrolled.”