Two drivers, supported by the GMB union, brought legal action against the private hire firm, arguing that they should be entitled to holiday pay, a guaranteed minimum wage and breaks.
The Central London Employment Tribunal ruled in their favour on Friday, and the GMB said the outcome of the case could have "major" implications for more than 30,000 drivers across England and Wales.
The case centred on whether drivers with the firm, where passengers hail cars using an app, are employees.
Uber designates its drivers as self-employed workers, claiming it is a technology company rather than a taxi firm, and says the arrangements allow people to be their own boss and work flexibly.
But drivers argue they are actual employees of the organisation, rather than independent operators running their own businesses.
igel Mackay from law firm Leigh Day, which represented the drivers, said: "We are delighted that the employment tribunal has found in favour of our clients.
"This judgment acknowledges the central contribution that Uber's drivers have made to Uber's success by confirming that its drivers are not self-employed but that they work for Uber as part of the company's business.
"Uber drivers often work very long hours just to earn enough to cover their basic living costs. It is the work carried out by these drivers that has allowed Uber to become the multi-billion-dollar global corporation it is."
Uber said it would be appealing against the judgment.
Jo Bertram, the company's regional general manager, said: "Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss.
"The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people we will be appealing it."