LONDON — Uber suffered another setback in its biggest market outside the United States on Friday when an employment tribunal in London rejected the ride-hailing company’s argument that its drivers are self-employed.
The decision, which affirmed a ruling issued last year, means that Uber will have to ensure that its drivers in Britain receive a minimum wage and paid time off. That creates problems for a common hiring model in the so-called gig economy that relies on workers who do not have formal contracts.
Companies argue that using such a model increases flexibility on both sides of the hiring equation, but critics counter that the system is exploitative and deprives employees of important safeguards like unemployment insurance.
The ruling was the second blow to Uber’s business here in recent months. In September, London’s transport authority barred the company from operating in the British capital.
In the case before the tribunal, two men, James Farrar and Yaseen Aslam, had challenged Uber on behalf of a group of 19 drivers, saying that the service had denied them basic protections by classifying them as self-employed. Uber countered with an argument it has used around the world: Its drivers were independent contractors.
“You can hide behind technology, but the laws are there, and they need to be obeyed and respected,” Aslam, 36, said in an interview after the tribunal issued its decision.
The acting chief of Uber’s British operations, Tom Elvidge, said the company would appeal the decision.