US ride-hailing app Uber on Friday lost a landmark case in Britain that would give drivers the right to paid holidays and the national minimum wage, lawyers representing the claimants said.
The London employment tribunal rejected Uber's appeal against an October 2016 ruling in a case that is being closely watched for the wider implications for Britain's booming "gig economy".
"Our clients have fought tirelessly to gain the rights that they clearly should have been afforded from the outset," Paul Jennings from law firm Bates Wells Braithwaite said in a statement.
"The ruling will have significant implications for approximately 40,000 Uber drivers and, more broadly, individuals engaged across the so-called gig economy," he said.
Uber said it will appeal the ruling.
"The main reason why drivers use Uber is because they value the freedom to choose if, when and where they drive and so we intend to appeal," Tom Elvidge, Uber UK's acting general manager, said in a statement.
"Over the last year we have made a number of changes to our app to give drivers even more control. We've also invested in things like access to illness and injury cover," he said.
Uber drivers are paid for each ride and the firm insists they are self-employed, choosing when, where and for how long they drive.
However, James Farrar, who brought the test case with fellow former driver Yaseen Aslam, has called Uber's business plan "brutally exploitative".
They are supported by the Independent Workers of Great Britain (IWGB) trade union, which also represents couriers, cleaners, foster carers and security officers.
"These companies are making a mockery of supposed employment rights," the union's general secretary Jason Moyer-Lee said in a statement.
Ahead of the ruling, an Uber spokesman told AFP that whatever the result, it "will not necessarily be the end of the process and we expect either side would appeal".
Any challenge would go to the Court of Appeal and finally the Supreme Court.
The Supreme Court is already preparing to consider a similar case involving the company Pimlico Plumbers, which is appealing a ruling that one of its former plumbers was entitled to employment rights.
Uber meanwhile is currently fighting a decision by London authorities not to renew its licence, owing to public safety concerns.
The company has about 40,000 drivers and 3.5 million customers in the British capital.