A tribunal has ruled that Uber drivers are not self-employed and so they are entitled to receive the national minimum wage and holiday pay, a decision which threatens the taxi app's business model.
ITV News consumer editor Chris Choi reports:
The GMB union took test claims from two Uber drivers, arguing the company was acting unlawfully by not providing certain employment rights, with the case centering on whether or not the drivers were self-employed.
The results of the case could have far-reaching consequences affecting thousands of other "gig economy" workers, such as workers for meal delivery service Deliveroo, where people work for multiple employers day to day without having a fixed contract.
"This is a monumental victory that will have a hugely positive impact on drivers ... and for thousands more in other industries where bogus self-employment is rife," said Maria Ludkin, legal director at the GMB union.
The drivers involved in the claim, James Farrar and Yaseen Aslam, told ITV News they were delighted at the ruling.
Mr Farrar said it was a "huge relief", adding: "The nightmare for London's mini-cab drivers is over."
Mr Aslam, who said he had been suspended without warning and without being given a reason earlier this year, said he felt "blessed" by the result.
"You feel like your own boss, but they have so much control over you," he said.
"While I've been campaigning, I've come across many drivers that have been abused, assulted. They felt like they had no rights... Hopefully, this is going to put an end to this."
Nigel Mackay from law firm Leigh Day, which represented the drivers, said: "We are delighted that the employment tribunal has found in favour of our clients.
"This judgment acknowledges the central contribution that Uber's drivers have made to Uber's success by confirming that its drivers are not self-employed but that they work for Uber as part of the company's business.
"Uber drivers often work very long hours just to earn enough to cover their basic living costs. It is the work carried out by these drivers that has allowed Uber to become the multi-billion-dollar global corporation it is."
Speaking outside the Central London Employment Tribunal, he added: "The tribunal has found the claimants, the Uber drivers, are workers for the purposes of the legislation and that they are therefore entitled to minimum wage and holiday pay.
"This is contrary to what Uber was suggesting, which was that they were self-employed. But they should be entitled to basic workers' rights like everybody else."
Uber - which allows users to book and pay for a taxi by smartphone - has said that it will appeal the decision.
"While the decision of this preliminary hearing only affects two people we will be appealing it," Uber's UK general manager Jo Bertram said.
The ruling is the first time Uber has faced legal action in the UK over whether its 40,000 drivers in the country are workers or self-employed.
TUC general secretary Frances O'Grady said: "What is happening at Uber is just the tip of the iceberg. Lots of people are now trapped in insecure jobs, with low pay and no voice at work.
"We need the Government to get tough on sham self-employment. "
Uber had argued that its drivers were self-employed rather than designated employed workers, and maintained that it is a technology company rather than a taxi firm.
The San-Francisco business is currently valued at £48 billion.
The company says it allows people to be their own boss and work flexibly, but the drivers who brought the legal challenge argued that the taxi app firm was acting unlawfully.
The test cases argued that they should be entitled to the national minimum wage and holiday pay.
However, representatives for Uber, which is headquartered in the Netherlands, had said its drivers are not exclusively tied to working for the company, and have the freedom to also work for other operators.
Uber has previously argued that UK drivers should not be allowed to enforce UK employment rights in UK courts, and should only seek arbitration in Dutch courts.