Uber has insisted that its fares will not rise after saying all 70,000 of its UK drivers will be guaranteed a minimum wage, holiday pay and pensions.
The ride-hailing giant said drivers would earn at least the National Living Wage, or £8.72 an hour, in a move that could shake up the wider gig economy.
It comes a month after it lost a legal battle in the UK over drivers' status.
Uber said it was "turning the page" on workers' rights, but some said it had not gone far enough.
Analysts also warned the company had increased prices in California after a similar ruling and was likely to do the same in the UK.
Writing in the Evening Standard, Uber's chief executive Dara Khosrowshahi said: "This is a significant improvement in the standard of work for UK drivers. But I know many observers won't pat us on the back for taking this step, which comes after a five-year legal battle.
"They have a point, though I hope the path that we chose shows our willingness to change."
Union leaders and employment experts said Uber's move would have far reaching consequences for the gig economy. Bates Wells lawyer Rachel Mathieson, who represented Uber drivers fighting for worker rights, called it "a very significant milestone".
However, one union complained Uber would still not pay drivers for the time they spent waiting in between jobs.
The changes also do not apply to couriers in its food delivery business, Uber Eats, who remain self-employed.
Source: BBC
