Uber has lost its appeal against a landmark ruling ordering it to treat its drivers as workers, paying them minimum wage and affording them rights including sickness and holiday pay.

The business giant vowed to launch another appeal in the case, which could affect 40,000 drivers in London and has prompted concern among customers over potential price rises.

Uber sent only one representative to an Employment Appeal Tribunal hearing in London, which was packed with supporters of its drivers James Farrar and Yaseen Aslam.

Mr Farrar, who has since stopped working for Uber because he could not earn enough money, said they would “fight to the end” if the firm is granted permission to launch a second appeal.

“It’s not about me and Yaseen, it’s not about all our co-claimants, all Uber drivers – it’s about workers everywhere,” he told The Independent.

“Uber wants to stay in the internet cloud and divorce itself from the reality on the ground.

“It’s time to come back down to the ground, face its responsibilities and run this business in a responsible way.”

Mr Farrar said that if Uber’s legal argument succeeds more firms may seek to replicate its business model and “treat workers as serfs”.

(AFP/Getty Images) (AFP/Getty)

“You’ll see the Uberfication of industry across Britain,” he added. “That’s the future if we lose this, so we have to continue fighting it until the end and we will.”

Judge Jennifer Eady QC threw out Uber’s arguments against a previous tribunal’s findings that its drivers must be classed as workers and afforded the corresponding rights under UK and EU law.

She told the hearing that any Uber driver with the app switched on in the area they were authorised to work in, and accepting assignments “was working for Uber”, which itself classes them as self-employed.

The company’s lawyers called the findings “inconsistent and perverse” in their appeal but Judge Eady said: “The reality of the situation was that the drivers were incorporated into the Uber business…the true relationship was not one where Uber was acting as the drivers’ agent.”

She thanked the claimants for their “great patience” in the long-running case, as they hugged and celebrated the result.

Mr Aslam said he had “suffered a lot” through the gruelling case, adding: “They’ve got thousands of drivers on the streets with as little liability to them as possible and that can’t be right.

“You can’t have a company making millions and workers working below minimum wage.”

A report by Labour MP Frank Field previously found that some drivers were in danger of taking home as little as £2 an hour – less than a third of the National Living Wage.

Finding that regulatory risks and charges were being offloaded on drivers, the report concluded that “the practices described to us by drivers working with Uber would appear to fit the Victorians’ definition of ‘sweated labour’”.

Uber controversies Show all 4 1 /4 Uber controversies Uber controversies June 2017 Travis Kalanick resigned from his position as CEO of Uber in July of this year, after a tumultous period for the company. A sexist workplace culture was exposed by a damning internal report, leading to heightened pressure on the CEO and consequently to him taking a leave of absence in June. A week later he was forced to resign after losing the confidence of the board of investors AFP/Getty Uber controversies June 2017 Indian police escort Uber taxi driver and convicted rapist Shiv Kumar Yadav following his court appearance in New Delhi on 8 December, 2014. An Uber executive, Eric Alexander, was fired in June of this year after reportedly obtaining the records of the rapist's victim, with the intent to cast doubt on her account of the incident. She later sued the company for defamation and violating her privacy rights Chandan Khanna/AFP Uber controversies May 2017 The company were ordered to pay up to $45 million dollars back to New York based drivers, after taking too much in commission over a two and a half year period. “We made a mistake and we are committed to making it right by paying every driver every penny they are owed, plus interest, as quickly as possible,” said Rachel Holt, Uber’s regional general manager in the US and Canada, to the Wall Street Journal Getty Uber controversies December 2016 Uber's self-driving cars were ordered to be removed from the roads by a Californian car regulator, after being spotted skipping traffic lights. Uber insist that the incidents were "human error" rather than a design flaw. The New York Times later refuted this in an article claiming the autonomous technology had in fact failed Youtube/KTVU

Its model is seen as part of concerning trends in the “gig economy”, where increasing numbers of workers have been left vulnerable by short-term contracts or freelance jobs.

In another case, London firm Pimlico Plumbers lost its appeal against a ruling finding a long-serving plumber was a worker entitled to the same rights contested in the Uber case, while another tribunal is considering Deliveroo’s business model.

Paul Jennings, a lawyer who represented Mr Farrar and Mr Aslam for Bates Wells Braithwaite, said the ruling could have “significant implications for approximately 40,000 Uber drivers and, more broadly, individuals engaged across the so called ‘gig economy’.”

He added: “We anticipate that tens of thousands drivers will now seek to make substantial back-dated claims.”

Hailing the “landmark victory” against Uber, the GMB union urged it not to “waste everyone's time and money dragging its lost cause to the Supreme Court”.

The Independent Workers of Great Britain (IWGB) is representing appellants in the Deliveroo and Uber cases and said it would continue lobbying for Mayor of London, Transport for London (TfL) and the Government to take wider action.

Its General Secretary, Jason Moyer-Lee, said Friday’s decision classed Uber drivers as workers rather than employees while rejecting the firm’s claim that they would lose their “freedom” as a result of the ruling.

“They’re still self-employed but they’re in a different category,” he added. “They carry out their work as part of someone else’s business and for that reason they’re entitled to a number of employment rights.”

Stephen Hull, who works as an Uber driver in Birmingham, said that although the legal case only involved the company’s London branch it had set a nationwide precedent.

Uber classes itself as an 'agent' of self-employed drivers (Getty)

“We face the same problems, be it in Birmingham or London or Manchester or wherever in the UK, or even throughout the world,” he told The Independent.

“Its modus operandi works on over-supply and there being a car on each corner that is convenient for passengers.

“I can see that, but as a driver who is bearing the cost of that over-supply I’m not making enough money and it’s something that needs to be addressed.”

Mr Farrar and Mr Aslam won the first round of the employment tribunal in October last year but Uber appealed, saying it could deprive drivers of the “personal flexibility they value”.

It has 14 days to launch another appeal attempt, which could take the case to the Court of Appeal and eventually the Supreme Court.

Tom Elvidge, Uber UK’s acting general manager said: “Almost all taxi and private hire drivers have been self-employed for decades, long before our app existed. 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.

“The tribunal relies on the assertion that drivers are required to take 80 per cent of trips sent to them when logged into the app. As drivers who use Uber know, this has never been the case in the UK.

“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 and we’ll keep introducing changes to make driving with Uber even better.”

The judgement came months after Uber was dealt another blow by TfL, which said it will not renew the firm's licence.

The US-based company has launched a separate appeal against that decision and Mr Farrar said it was a “terrible time” for it to continue fighting the workers’ rights case.