Uber (NYSE:UBER) lost a crucial legal fight in the U.K. on Friday as the country’s Supreme Court upheld a ruling that its drivers are workers, not independent contractors.
Judges voted unanimously to dismiss Uber’s appeal against the ruling. The decision could have huge implications for Uber’s U.K. business, as well as the wider gig economy.
Shares of Uber sank over 1% in pre-market trading. They opened for business in New York Friday at $59.00.
Friday’s verdict concludes an almost five-year legal battle between Uber and a group of former drivers who claim they were workers entitled to employment rights like a minimum wage, holiday pay and rest breaks.
In 2016, an employment tribunal ruled in favor of the drivers, led by Yaseen Aslam and James Farrar, who claimed they were workers employed by Uber and therefore entitled to certain labor protections.
Uber insists its drivers are self-employed and that it acts as more of an “agency” which connects them with passengers through an app. Uber wants to keep the legal classification of its drivers as independent contractors unchanged, arguing drivers prefer this “gig” model as it’s more flexible — it also benefits Uber from a cost perspective.
“This ruling will fundamentally re-order the gig economy and bring an end to rife exploitation of workers by means of algorithmic and contract trickery,” Farrar, general secretary of the App Drivers & Couriers Union, said in a statement.
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