A London employment tribunal has ruled that Uber Technologies Inc. must reclassify two of its drivers as employees rather than freelancers, in a landmark ruling that could put the ride hailing service’s future in the United Kingdom in jeopardy.

Uber’s entire business model is based on the fact that its drivers are considered independent contractors rather than full employees. That exempts Uber from providing many of the benefits associated with employment, such as holiday pay, overtime, paid time off and so on. This keeps Uber’s costs low and its driver pool high, which are the company’s two major advantages over traditional taxi companies.

Throughout its history, Uber has argued that it is not a transportation service but rather a technology company that allows drivers and riders to connect with one another, which is why it does not consider its drivers to be employees. The U.K. court disagreed with this argument, and the judges on the tribunal criticized Uber’s tactic.

“It is, in our opinion, unreal to deny that Uber is in business as a supplier of transportation services. Simple common sense argues to the contrary,” the court said in its ruling.

The ruling also criticized comments made during the tribunal by Joanna Bertram, Uber’s regional general manager for the U.K.

“The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous. In each case, the ‘business’ consists of a man with a car seeking to make a living by driving it. Ms Bertram spoke of Uber assisting the drivers to ‘grow’ their businesses, but no driver is in a position to do anything of the kind, unless growing his business simply means spending more hours at the wheel.”

While the court’s strong language condemns Uber’s employment practices, the ruling currently affects only two drivers directly, James Farrar and Yaseen Aslam, who filed a lawsuit on behalf of themselves and 19 other Uber drivers. The ruling does not necessarily mean that the rest of Uber’s U.K. drivers will be automatically reclassified as employees, but if the company accepts the judgment, it will need to alter its employment practices and contracts to avoid future lawsuits from drivers. Uber has said that it will appeal the U.K. court’s ruling.

This is not the first time Uber has run into legal trouble over the way it employs its drivers. In 2015, a California judge ruled that Uber had to pay over $4,000 to one former driver to reimburse her for the time she spent driving for the service. As with the current case in the U.K., the California ruling affected only a specific driver rather than the entire company, and Uber has successfully defended the independent contractor status of its drivers in other states.

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