Uber has lost the legal battle and could set an important precedent, especially at a time when riders are mobilising more than ever to have their work recognised as equal to that of Uber drivers. The transport company’s more than 70,000 drivers operating in the UK will receive a guaranteed minimum wage, paid holidays and automatic access to a pension scheme from Wednesday.

The company said all its drivers will now be paid at least the national minimum wage of £8.72  per hour, rising to £8.91  next month.

The announcement comes a month after the US company lost a legal battle that began in 2016 over the status of drivers, meaning it will now have to classify them as own “workers” rather than self-employed. The Supreme Court ruling concluded on 19 February that Uber workers should have access to all basic rights, as well as paid holidays.

Uber appealed to the court after losing litigation in three lower courts, after a labour court ruled in 2016 that the company’s drivers provide their services as workers and not as external contractors.

The ruling recognises the drivers as workers, but not employees, who enjoy superior employment benefits under UK law, and denies that they are self-employed, as the company claimed.

Jamie Heywood, Uber’s regional manager for Northern and Eastern Europe, called today an “important day” for drivers in the UK, while unions said that “Uber had to be dragged screaming and kicking to do the right thing”.

“Drivers have consistently indicated to us that they wanted the flexibility we provide but also the benefits, and we have struggled to find a way to bring the two together in a way that works for both us and them,” Heywood said.

The Supreme Court ruling also left Uber facing a large compensation bill of up to £12,000  for each of its workers.

From today, drivers will also be paid holiday pay based on 12.07% of their earnings and will be automatically enrolled in a pension scheme to which the company will contribute along with the worker. Workers will also remain free to choose if, when and where they work.

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