Uber grants its UK drivers employee status in world first

• Uber to pay drivers a minimum wage, holiday pay and pensions
• This is a major change in the business model of a company which had argued before Britain's Supreme Court that its drivers were self-employed.
• Ride-hailing app giant says all drivers will earn at least the National Living Wage, which is £8.72 an hour and rises to £8.91 next month.

Uber on Tuesday said it is granting its UK drivers employee status, with benefits including a minimum wage -- a world first for the US ride-hailing giant.

Weeks after a top court ruling that could shake up Britain's wider "gig economy" of 5.5 million people, Uber said its drivers would also get holiday pay and a pension.

It is a massive change in the business model of a company which had argued before Britain's Supreme Court that its drivers were self-employed.

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From Wednesday, "more than 70,000 drivers in the UK will be treated as workers, earning at least the national living wage when driving with Uber," the taxi app said in a statement.

"This is a floor and not a ceiling, with drivers able to earn more."

The court ruled last month that Uber's drivers are entitled to worker's rights.

The decision capped a protracted legal battle between UK drivers and the Silicon Valley taxi and delivery company.

The UK's minimum hourly wage will rise slightly from April to £8.91 ($12.37, 10.40 euros).

On average, drivers earn £17 per hour in London and £14 in the rest of the UK, according to Uber.

- 'Flexibility remains' -

Uber said its action over workers' rights "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.

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"Uber has consulted thousands of drivers over the last several weeks, who said they wanted these additional benefits but without any loss of flexibility," it added.

The higher costs for Uber come as it faces sliding driver bookings owing to the Covid-19 pandemic, despite strong demand for the Uber Eats food delivery service during national lockdowns.

Uber is meanwhile calling for companies in the sector to form a joint fund that would allow drivers who work for different apps to be able to access protections and benefits such as paid holidays.