Uber has lost a landmark battle at the UK’s top court, which ruled on Friday that its drivers are workers entitled to rights such as the minimum wage in one of the most significant employment cases for decades.

The Supreme Court ruled in favour of 35 Uber drivers who first brought the case in 2016, arguing that they were not self-employed because Uber controlled much of their work, allocating their customers and dictating their fares.

Lord George Leggatt, one of the justices of the Supreme Court, said it had unanimously found against Uber. “Drivers are in a position of subordination and dependency in relation to Uber such that they have little or no ability to improve their economic position through professional or entrepreneurial skill,” he said as he handed down the ruling.

The ruling grants the drivers the right to holiday pay as well as the UK minimum wage.

The decision comes as a major blow to the ride-hailing company in one of its biggest markets. Though the immediate practical implications of the decision for the 35 Uber drivers are yet to be determined, the judgment could apply to thousands of other drivers who are preparing a mass action lawsuit against the company.

Lawyers say it could also lead to litigation against other “gig economy” companies that operate a similar business model.

Paul Jennings, a partner at law firm Bate Wells, which represented the Uber drivers, said there were at least 15,000 claims from other drivers that had been waiting on the decision. “The judgment goes to the very heart of their business model,” he added.

The drivers who brought the Supreme Court case are now set to return to the employment tribunal, which will decide on their compensation. Leigh Day, the law firm fighting the case on behalf of some of the drivers represented by the GMB union, said that if they win, thousands of Uber drivers could be entitled to compensation of £12,000 each. 

Jamie Heywood, Uber’s regional general manager for northern and eastern Europe, said Uber had made “some significant changes to our business”, including free insurance for drivers in case of sickness or injury. “We are committed to doing more and will now consult with every active driver across the UK to understand the changes they want to see,” he said.

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