Two drivers, James Farrar and Yaseen Aslam, won an employment tribunal case a year ago after arguing that they were "workers" and entitled to the minimum wage, sick pay and paid leave.
Uber appealed, arguing its drivers were self employed and were under no obligation to use its booking app.
Friday, an employment tribunal court in London upheld the lower court's ruling - emphasizing that the structure of Uber's labor model forces the company to treat drivers the same as other employees under British and European Union laws.
However, union GMB, which backed the case, said: "Uber must now face up to its responsibilities and give its workers the rights to which they are entitled. This is clearly not the case with people who drive through Uber - they choose when and how long they work for by logging on or off the app", said Chris Bryce, chief executive of the Association of Independent Professionals and the Self-Employed. A July report by Labour MP Frank Field outlined that, because of the way Uber had structured its business, drivers in the United Kingdom were taking home as little as $2.64 an hour - less than a third of what they were entitled to under the country's National Living Wage.
Jenning said it's conceivable that some Uber drivers could end up being workers and some could end up being self-employed.
BuzzFeed News understands Uber will proceed with further appeals, with the Court of Appeal and the Supreme Court two possible stages in the appeal process.
Nick Elwell-Sutton, partner at Clyde & Co, said today's ruling should not be taken as the last word, given that the issue is "likely to reach the Supreme Court".
In that case, the Court of Appeal found that a plumber, described in his contract as a "self-employed operative", was entitled to worker rights. Uber must play by the rules and stop denying its drivers basic rights at work. "No company, however big or well-connected, is above the law".
"This ruling should put gig economy employers on notice". Sham self-employment exploits people and scams the taxman.
"In the meantime there may be pressure on the Government to focus on the Taylor Review of Modern Working Practice's recommendation of creating "dependent contractors" who are eligible for worker's rights".
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