Uber suffered an important labor defeat in its largest European market on Friday when Britain’s Supreme Court ruled that drivers must be classified as workers entitled to a minimum wage and vacation time.
The case had been closely watched because of its ramifications for the gig economy, in which companies like Uber rely on a sprawling labor force of independent contractors to provide car rides, deliver food and clean homes.
Uber and other gig-economy companies say their model gives people flexibility to choose when they work, while critics say it has eroded job protections and the traditional company-employee relationship.
Uber has fought the effort by drivers in Britain to be classified as workers for the past five years, appealing the decision all the way to the country’s top court. Friday’s ruling is expected to initially affect only the 25 drivers who brought the case, but is expected to set a precedent for others across the country. An employment tribunal will decide how to reward the drivers.
The drivers argued that although Uber claims to be a technology platform that connects drivers with passengers, it behaves more like an employer by setting rates, assigning rides, requiring drivers to follow certain routes and using a rating system to discipline drivers.
Nigel Mackay, a partner at Leigh Day, the law firm representing the drivers, said that Uber would have to begin providing a minimum wage and holiday time to drivers or risk facing a wave of cases from others.
Uber and other gig economy companies have been fighting off efforts in other parts of the world to classify workers as employees. In California, the companies funded a successful ballot measure in the November election to exempt them from a law that would have required them to employ drivers and pay health care, unemployment insurance and other benefits.
Mr. MacKay said he hoped the decision would provide a stronger legal basis for other countries to provide more labor protections for gig workers.
“People around the world will be follow this decision,” he said.
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