Uber says it is to provide a range of protections for its drivers and couriers as it tries to demonstrate it is a responsible member of the so-called gig economy.
The ride-hailing app, which is battling to secure its operating licences in London, York and Brighton amid safety concerns, said it was to provide its 70,000 UK "partners" with free insurance cover.
Its decision was announced three months after the Government pledged improved rights, such as sick pay, as part of a crackdown on the casual employment sector.
Politicians were yet to give their response to Uber's plans, but the Independent Workers Union of Great Britain (IWGB) criticised Uber, likening its announcement to a publicity stunt, rather than a genuine move to address workers' concerns.
James Farrar, chair of the union's United Private Hire Drivers branch, said: "It's good to see Uber is reacting to the pressure piled on by the IWGB's campaigns and legal action.
"Sadly, this is once again a case of tinkering around the edges for a quick PR win, rather than dealing with the issue at hand.
Mr Farrar, who is also a co-claimant in an employment rights case against Uber, added: "If Uber really cares about the workers on which the business relies, it should stop fighting us in court and give the drivers the rights they are entitled to under the law."
Uber admitted its move, which followed a series of failed court battles on the status of drivers, did reflect justified criticism that it had not always treated them as partners.
It said the policy would give them the "security and peace of mind" they had demanded while maintaining the flexibility of being self-employed.
"This new product covers all eligible partners in the UK for major costs or lost income resulting from accidents or injuries that occur on trip.
"It also provides protection for major life events that happen off trip like severe sickness and injury, maternity or paternity leave and jury duty."
The policy would pay out a £50,000 lump sum in the event of a driver's death while working.
It also included up to £75 per day for injury to driver partners and a £1,000 payment as maternity or paternity cover.
The company added that 150,000 people were eligible for the Partner Protection initiative across Europe from 1 June.
However, it said there were some conditions.
Uber explained that to be eligible for the off-trip insurance, a driver must have completed 150 trips in the previous eight weeks while an Uber Eats partner must have completed at least 30 deliveries in the previous eight weeks to qualify.
Chief executive Dara Khosrowshahi said: "Uber wouldn't be what it is without drivers and couriers – they are at the heart of the Uber experience.
"We're committed to being better a partner, and that starts by being a better listener. That's why I'm thrilled to provide this groundbreaking protection alongside a trusted insurer like AXA, giving our drivers and couriers the peace of mind they tell us they want while preserving the flexibility they value.
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"We'll continue to ensure that the voices of the drivers and couriers are heard as we take Uber forward together."
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