The company said it would contribute 3 per cent of a driver's earnings into a pension plan, while drivers can choose to contribute a minimum of 5 per cent of their qualifying earnings. Eligible drivers will have the possibility to opt-out of the pension scheme.

Drivers will also receive retroactive payments dating back from 1 May 2017 or the date of their first delivery in case they joined more recently.

Uber worked with the UK’s pensions regulator to create the scheme, which is the first of its kind for flexible private hire drivers.

The decision comes in the context of its decision in March to treat all drivers in the UK as workers. Uber’s step to treat all of its drivers as workers, committed the business to provide minimum wage guarantees, holiday pay, and access to enrolment into pension plan. The pension scheme is not applicable for couriers who choose to work using Uber Eats app.

It also follows the historic trade union recognition deal between Uber and the General, Municipal, Boilermakers' and Allied Trade Union (GMBATU, shortened to GMB), that jointly pledged to work together to raise the standards of work across the industry.

The pension scheme will only cover eligible Uber drivers, despite the fact that many also work with other operators, in what is widely referred to as ‘multi-apping’.

For this reason, Jamie Heywood, Regional General Manager of Northern and Eastern Europe, said he is extending an invitation to work with operators such as Bolt, Addison Lee and Ola to create a cross-industry pension scheme. According to him: "This will enable all drivers to save for their futures whilst working across multiple platforms,".

Patrick Luthi, Chief Executive of NOW: Pensions said: “This is a landmark step forward for this sector and we pledge our support to develop a cross-industry pension scheme.  Furthermore, we want to help other industries provide their flexible workers with access to pensions as part of our mission to create a fair pension system for all.”

Alex Fleming, Regional President of Northern Europe at Adecco, said: “As the UK labour market continues to be redefined as a result of the global pandemic, the need for equitable treatment and greater security is integral to building back better and supporting flexible workers. This is an industry first that not only paves the way in improving workers’ rights and protections, but also contributes to sustainable futures for drivers”.

Stephen Timms, Chair of the Work and Pensions Select Committee, welcomed Uber’s call for a cross-sector approach to pension saving: “The all-party Work and Pensions Select Committee has called on Ministers for a timetable for its promised Employment Bill, to improve protections for all gig-economy workers.”

Britain's Pensions Regulator said it noted the positive steps taken by Uber and called on all gig economy employers to enrol eligible staff in pension schemes.