The world-famous ride-hailing firm had appealed against an initial ruling that determined its drivers should be treated as workers rather than self-employed.
But that ruling has now been upheld by the Court of Appeal, prompting Uber to say that it will take its appeal to the Supreme Court.
James Farrar, who is chairman of the United Private Hire Drivers branch of the IWGB union, said: "I am delighted today's ruling brings us closer to the ending Uber's abuse of precarious workers made possible by tactics of contract trickery, psychological manipulation and old-fashioned bullying."
Farrar - who previously drove an Uber car - described the company's attitude towards the case as "cynical".
He said: "This is nothing more than a cynical ploy to delay inevitable changes to its business model while it pursues a record breaking $120 billion stock market flotation.
"It's time for Uber to come clean with all its stakeholders and abide by the decision of the courts."
And, according to the GMB union, the time has come for the ride-hailing firm to "just accept the verdict" rather than continue with its appeals.