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Uber Loses UK Supreme Court Appeal Over Driver Employment Status

Britain's highest court has ruled that Uber must treat its UK drivers as workers, not contractors, and pay them minimum wages and benefits, ending a years-long battle between the ride-sharing group and London transport officials.

Uber Technologies UBER shares slumped lower Friday after the ride-sharing group lost an appeal to Britain's Supreme Court that will likely force the group to pay minimum wages and benefits to drivers in its biggest European market.

The Supreme Court decision caps a four-year battle between the San Francisco-based tech group and Transport for London, a government body that oversees activity in the British capital. TfL, following a case brought by two drives who claimed to be 'workers' -- a unique legal status in the U.K. -- rather than independent contractors. 

Lord Leggatt, the Court's leading Justice in the case, said he was "not convinced" that Uber's contracts with its drivers met TfL rules of employment, while the court added that the arrangements “can be seen to have as their object precluding a driver from claiming rights conferred on workers by the applicable legislation”.

Uber shares were marked 1.75% higher in early trading Friday following the Supreme Court's decision to change hands at $60.00 each. 

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

“We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see," he added.

Uber's involvement in the London market has been beset by battles with TfL over worker rights and public safety, while its broader image took a hit through the use of a Netherlands-based sister company to avoid paying a 20% value-add-tax on rides booked by customers in Britain, a technique that one U.K. lawyer claims has cost taxpayers nearly £1 billion.

Uber won a long-running appeal with TfL in September when Deputy chief magistrate Tan Ikram aid he was convinced that the ride-hailing group "no longer poses a risk to public safety … despite historical failings" and granted it a license for the next 18 months.

Transport for London, which is headed by Mayor Sadiq Khan, had argued that thousands of Uber journeys in the capital were made in cars driven by non-licensed drivers using fraudulent IDs to log onto the group's platform.