Uber has lost a High Court battle against giving its drivers basic employment protections, including minimum wage and holiday pay.
The judgement could put Uber's business model in the UK at risk, requiring it to recognise drivers as "limb (b)" workers – crucially allowing them to collective bargaining rights.
The company has been engaged in legal appeals since 2016, when an employment tribunal found it unlawfully classed drivers as independent contractors.
Sir Terence Etherton, the second most senior judge in England and Wales, told the court that the tribunal was "not only entitled, but correct" to class Uber drivers as workers.
He added: "Not only do we see no reason to disagree with the factual conclusions of the [tribunal] as to the working relationship between Uber and the drivers, but we consider that [it] was plainly correct."
During the course of the appeals process, the company has not implemented the tribunal's findings – which the High Court upheld by a majority of two to one.
A spokesperson for Uber told Sky News: "This decision was not unanimous and does not reflect the reasons why the vast majority of drivers choose to use the Uber app.
"We have been granted permission to appeal to the Supreme Court and will do so," the company added.
To protest the lack of rights during the appeals process, Uber drivers went on strike in October and called for passengers to not use the app during the same period in a show of solidarity.
The strike by members of the Independent Workers Union of Great Britain (IWGB) was the first time that a trade union has taken action against the company.
The secretary of IWGB's private hire drivers branch, Yaseen Aslam, who is a co-claimant in the case, said he was "delighted" with the judgement.
"I'm delighted with today ruling, but frustrated that the process has dragged on for over three years," said Mr Aslam.
"It cannot be left to precarious workers like us to bring companies like Uber to account and despite the personal price we have had to pay, we are the lucky ones.
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"We know of many that are under such hardship, that it would be unimaginable for them to take a multi-billion pound company to court.
"It is now time for the government and the Mayor of London to act and stop letting companies like Uber take them for a ride," Mr Aslam added.