The Supreme Court Justices unanimously dismissed Uber's appeal.
Uber drivers in Britain should be classed as "workers" and not self-employed, the U.K. Supreme Court ruled Friday, in a decision that threatens its business model and holds broader implications for the so-called gig economy.
Uber drivers are now treated as self-employed, meaning that in law they are only afforded minimal protections.
Uber is calling for companies in the sector to form a joint fund that would allow drivers who work for different apps to be able to access protections and benefits such as paid holidays.
'GMB will now consult with our Uber driver members over their forthcoming compensation claim'.
They argued that Uber controlled almost all the aspects of their working conditions, including who they could accept for rides and how much they would be paid, meaning the company was acting as their employer.
Uber takes active steps to prevent drivers and passengers from having an agreement outside of the Uber app.
Being classified as employees would have entitled workers to a minimum wage and benefits like sick leave and unemployment insurance.
Uber took their case to the Employment Appeal Tribunal (EAT) in 2017, which also ruled against the ride-sharing company.
A law firm enlisted by the GMB union to represent Uber drivers says they will now be entitled to compensation for lost pay. Uber then appealed to the Supreme Court.
But lawyers representing drivers said the tribunal was entitled to conclude that drivers were working. They face two choices: accept the burden of the extra costs associated with engaging workers, or rethink their fundamental structure, if they want their people to continue to maintain true self-employed status.
In his judgment, Lord Leggatt said that workers were logging in to the Uber app had entered into a contract with the company to "perform driving services for Uber London", rather than the riders themselves. "It will shape all future cases concerning the gig economy".
"Uber can not appeal the decision further, so we may see the business looking to pass on its increased operating costs to customers using the platform. As a business, it will need to reflect very carefully on the implications of the judgment".
"Today's decision could be decisive for similar worker status cases and is likely to encourage those employed in similar gig economy roles to bring claims to enforce their rights as workers".
The legal battle began in 2016 when two-ex Uber drivers argued they should receive holiday pay and minimum wage.