Uber just lost a major legal battle over whether its UK drivers count as workers and are entitled to minimum wage

• Uber just lost a UK Supreme Court ruling over drivers' rights.
• The court ruled that drivers can be classified as workers and are entitled to rights such as holiday pay.
• The legal battle began in 2016 when two-ex Uber drivers argued they should receive holiday pay and minimum wage.

Uber just lost a major ruling from the UK's top court on whether its drivers should be classified as workers instead of self-employed contractors.

The Supreme Court made its verdict during a hearing which started at 9:45 a.m. GMT on Friday. The judges concluded that Uber drivers should be counted as workers, entitling them to basic worker rights such as holiday pay and national minimum wage.

The decision potentially threatens Uber's business model in the UK, one of its biggest markets.

The dispute will go back to a tribunal, which will determine how much the 25 drivers who brought the case five years ago will be awarded.

The legal battle kicked off in 2016 when two ex-Uber drivers, Yaseen Aslam and James Farrar, filed a lawsuit against Uber. They argued that the ride-hailing company was breaking UK employment law by failing to offer basic worker rights, and won.

Uber fought back and appealed the ruling in 2017. The company said it acted like other traditional minicab firms and counts its drivers as independent contractors, which ultimately gives Uber drivers minimal protections, such as no holiday or sick pay.

Uber considers itself a technology platform that connects riders and drivers and takes a payment in the process.

Yaseen Aslam, co-lead claimant and App Drivers & Couriers Union President, told Insider Friday: "I understand the implications of how important today's ruling is for millions of precarious workers."

He said: "These companies, like Uber, rely on vulnerable people they could exploit who don't understand the law or they don't know how to assert their rights."

The government also has to "take responsibility on this abuse of rights," Aslam added.

James Farrar, co-lead claimant and App Drivers & Couriers Union General Secretary said in a statement after winning the court case that the ruling will "re-order the gig-economy and bring an end to rife exploitation of workers."

"Uber drivers are cruelly sold a false dream of endless flexibility and entrepreneurial freedom. The reality has been illegally low pay, dangerously long hours and intense digital surveillance," he said.

Farrar stressed that the government must strengthen the law so workers can access sick pay and other protection in companies.

Jamie Heywood, Uber's regional general manager for northern and eastern Europe, said: "We respect the Court's decision which focussed on a small number of drivers who used the Uber app in 2016."

"Since then we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury," Heywood added.

Daniel Barnet, an employment lawyer at Outer Temple Chambers, wrote in a bulletin in reaction to the news that the ruling means that "Uber drivers are entitled to claim minimum wage (including backpay for minimum wage), with their minimum wage claims being based upon their entire working day, not just when they had a rider in their cabs."

He also said they can claim up to two years' backpay and 5.6 weeks' annual leave each year, plus whistleblowing and other rights.

Uber slipped as much as 4.02% in the premarket, as investors reacted to the news. The stock has pared some loses, now trading at 3.12% below last night's close.

This isn't the only legal battle Uber has faced in the UK in the past six months.

The regulator Transport for London (TfL) revoked Uber's license in 2019 for the second time after it said drivers were using fake identities to pick up passengers. The taxi app company went to court in September 2020 to appeal against TfL's decision and won an appeal in court against the TfL, securing its right to operate in London.

The mayor of London, Sadiq Khan, said he would continue to closely monitor Uber and take "swift action" if necessary.

This is a developing story.