March 17 (UPI) -- In a historic victory for gig workers, rideshare giant Uber on Wednesday began paying all British drivers a minimum wage and some benefits, following a major legal defeat last month that raised questions as to whether the company might withdraw from the country altogether.
The move appears to put an end to a dispute that's been going for years between Uber and British drivers about whether they should be classified as employees or independent contractors.
The issue was first raised in 2015 and has since made its way through British courts and ended up in the Supreme Court, which ruled last month that Uber ought to classify drivers as employees, which entitles them to a minimum wage and other protections.
Uber's announcement Tuesday said it will grant a minimum wage, provide some benefits to British drivers and treat them as "workers," but not actual "employees."
"A worker is a classification that is unique under U.K. employment law," the company wrote in a filing with the U.S. Securities and Exchange Commission. "Workers are not employees (and remain self-employed for tax purposes) but are entitled to the minimum wage, holiday pay, and, if eligible, a pension."
The company said drivers over the age of 25 across Britain will now earn a minimum of almost £9 per hour, or $12.40. They will also earn paid time off and other benefits like automatic enrollment in a company pension plan. Drivers will keep free health insurance coverage and parental payments, which have already been in place for three years.
"This is an important day for drivers in the U.K.," Jamie Heywood, Uber regional general manager for Northern and Eastern Europe, said in a statement. "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."
The App Drivers and Couriers Union, the organization that covers Uber drivers, said it is not entirely satisfied with Uber's concessions.
"The Supreme Court ruled that drivers are to be recognized as workers with entitlements to the minimum wage and holiday pay to accrue on working time from log on to log off," James Farrar and Yaseen Aslam, the drivers who initiated efforts to classify drivers as employees six years ago, said in a statement Wednesday.
"Uber is committing only to these entitlements to accrue from the time of trip acceptance to drop off. This means that Uber drivers will be still short-changed to the tune of 40-50%."
Uber has been involved in various spats in Britain over the past several years. Transportation officials in London at one point suspended the company's license to operate in the city over safety and other concerns. The impasse was ultimately settled, but it and the employee-or-contractor issue led many to wonder how long Uber would remain committed to the British market.
A California court ruled last year that Uber must classify drivers in the state as employees, which would grant a minimum wage and other benefits. Uber responded by saying such changes would force a radical change to its business model and would likely result in the company withdrawing entirely from the state.
Uber and competitor Lyft ultimately prevailed in California when voters approved Proposition 22, which exempted the companies from the court's ruling.
"Companies like Uber need to step up and work with governments to provide all gig workers with benefits and protections, while also preserving their freedom and flexibility," Uber CEO Dara Khosrowshahi said last October. "But employment comes with a cost: hundreds of thousands of drivers would lose work opportunities overnight."
"If Uber instead employed drivers, we would have only 260,000 available full-time roles -- and therefore 926,000 drivers would no longer be able to work on Uber going forward," he added. "In other words, three-fourths of those currently driving with Uber would be denied their ability to work.
"I'm not arguing that gig work is perfect. ... Instead of eliminating opportunity for nearly a million people, we should endeavor to improve the benefits and protections for gig workers."