US ride-hailing giant Uber won praise Wednesday from Britain's government and trade unions after granting UK drivers worker status, sparking hopes that more tech firms will follow suit.

Uber revealed late Tuesday that it is handing UK drivers workers' rights including holiday pay, pensions and a minimum wage -- in a world first for the group that also marked a major U-turn.

The move came after London's Supreme Court last month ruled that Uber's 70,000 UK drivers were entitled to the rights, in a landmark decision for Britain's estimated 5.5 million gig economy workers.

Uber's change of heart, following a protracted legal battle with drivers, was "absolutely to be welcomed", business minister Kwasi Kwarteng told Sky News.

"I've always said that the new phase of our economy should be about protecting workers' rights, driving higher standards and driving new technologies."

British labour law distinguishes between workers, who can receive the minimum wage and other benefits, and employees who have formal contracts.

Uber UK drivers were previously classified as self-employed, in line with many other gig economy firms, attracting fierce criticism from trade unions.

Uber's change of heart, following a protracted legal battle with drivers, was "absolutely to be welcomed", business minister Kwasi Kwarteng told Sky News.
Uber's change of heart, following a protracted legal battle with drivers, was "absolutely to be welcomed", business minister Kwasi Kwarteng told Sky News. AFP / Daniel LEAL-OLIVAS

"Uber's announcement should mark the end of the road for bogus self-employment," said GMB trade union official Mick Rix.

The decision "opens the door for workers, and their unions, to win the fight for better pay and conditions at companies across the gig economy".

Frances O'Grady, general secretary of the TUC, Britain's trades union umbrella organisation, also called on tech platforms to do more.

"We will be pushing hard for Uber and other platform companies to recognise unions and give staff a proper voice at work," O'Grady said.

"Gig workers deserve the same basic rights as everybody else. Unions won't rest until pay and conditions have improved across the gig economy."

London Uber drivers Yaseen Aslam and James Farrar, who were claimants in the Supreme Court fight, also welcomed Uber's U-turn.

Farrar described the announcement as "a step in the right direction" but argued that it still fell short.

He expressed concern that the Uber benefits would start to accrue when a driver accepts a ride -- rather than when they log into the firm's system.