A majority of justices in the U.K.'s Court of Appeal ruled that Uber drivers are employees, not independent contractors.
The court ruled in favor of London Uber drivers James Farrar and Yaseen Aslam, who filed the suit in 2016 in the U.K.'s employment tribunals arguing that Uber unfairly treats them as self-employed. The drivers were backed by Independent Workers Union of Great Britain (IWGB), a labor union representing independent workers.
If upheld in the U.K's Supreme Court, the decision would compel Uber to provide drivers with benefits including holiday pay and a guaranteed minimum wage, and could have broader implications for so-called gig economy workers.
"The decision will put further pressure on Uber to abide by U.K. employment law and start classifying its drivers as workers. It will also add pressure on the government to start to properly regulate employment law, something both have so-far failed to do," the IWGB said in a press release following the Court of Appeal decision.
Uber's position that its drivers are independent contractors, not employees, is also undergoing various challenges in U.S. jurisdictions. The company has long maintained that drivers' ability to make their own schedules, among other factors, mean that they cannot be considered employees. Drivers suing Uber argue that the company's standards, supervision and direction of its drivers "model" an employer-employee relationship, and entitle them to benefits such as unemployment insurance, minimum pay and reimbursement for expenses by Uber.
The U.K. ruling, and other legal disputes around Uber's contractor-based model, comes at a complex time for Uber as it prepares to test its business in the public markets. In December, the ride-hailing giant filed confidentially for an IPO and may go public as soon as the first quarter of 2019, according to reports. Uber may be seeking a valuation of more than $100 billion in its public offering.
Uber Technologies Inc. is permitted to appeal the ruling of the U.K. Supreme Court, and plans to do so.