For years, Uber has successfully deployed armies of lawyers and lobbyists around the world to fight attempts to reclassify drivers as company workers entitled to higher wages and benefits rather than lower-cost, self-employed freelancers.

Now the ride-hailing giant is retreating from that hard-line stance in Britain, one of its most important markets, after a major legal defeat.

On Tuesday, Uber said it would reclassify more than 70,000 drivers in Britain as workers who will receive a minimum wage, vacation pay and access to a pension plan.

The decision, Uber said, is the first time the company has agreed to classify its drivers in this way, and it comes in response to a British Supreme Court decision last month that said Uber drivers were entitled to more protections.

The decision represents a shift for Uber, though the move was made easier by British labour rules that offer a middle ground between freelancers and full employees that doesn’t exist in other countries.

That middle ground makes it unclear whether Uber will change its stance elsewhere. More labour battles are coming in the EU, where policymakers are considering tougher labour regulations of gig-economy companies, as well as in the US.

The fragile business model of Uber and other so-called gig economy companies depend on keeping labour costs down by using a sprawling network of workers defined as independent contractors. Although the services have altered how people commute and order takeout, and have been valued in the billions of dollars by investors, they have struggled to turn a profit. In 2020, Uber reported a net loss of $6.8 billion.

“I will be the first to admit that we’ve struggled to identify solutions that work for Uber and for those who earn on our platform,” Uber’s chief executive, Dara Khosrowshahi, said in an opinion article for The Evening Standard.

Uber had fought off past labour regulations by arguing that it acts only as a technology platform that connects drivers and passengers. But the justices ruled unanimously that Uber behaves more like an employer by setting rates.

New York Times News Service