A U.K. court has rejected the ride-hailer’s pleas to continue treating drivers as contractors.

The verdict, reported by the Guardian, throws out Uber’s appeal against a similar ruling from last year, and means that the company should act like a regular employer—paying drivers a minimum wage, for instance, and giving them time off. Uber is expected to appeal the decision again, which will require the case to be heard by a higher court, perhaps even ending up in the supreme court next year.

As we’ve explained before, the firm—along with others in the so-called sharing economy—has long argued that its driver-as-contractor approach provides workers with flexibility that they find useful and even empowering. Critics, however, argue that it’s exploitative and allows the firm to save millions of dollars on regular employment costs.

This is all perhaps a smaller worry for Uber than the fact that the London's transport regulator has declared the firm "not fit and proper" to provide its services in the city. As a result, Uber is currently appealing a revocation of its license to operate in London.

If Uber manages to convince authorities that it should continue to operate, the firm may yet find that having to pay minimum wages and provide vacation time seriously dents its earnings. London is Uber’s biggest market outside America, with 40,000 drivers, and the costs will ramp up quickly.

There's also the worry for Uber that London's push will serve as inspiration for other cities around the world that are keen to enforce a better deal for their taxi drivers. The firm’s new CEO, Dara Khosrowshahi, certainly isn't enjoying a smooth ride just yet.