A lawyer for the drivers vowed to keep fighting Uber's business model — common in the sharing economy — that classifies drivers as contractors instead of employees. (Photo: Diego M. Radzinschi/ALM)

Uber Technologies Inc. drivers suffered a major defeat in one of the gig economy's most closely watched labor fights with a ruling barring hundreds of thousands of drivers from suing as a group for better pay and benefits.

Tuesday's decision by a federal appeals court in San Francisco wasn't unexpected after the U.S Supreme Court in May bolstered the power of employers to force workers to use individual arbitration instead of class-action lawsuits.

A lawyer for the drivers vowed to keep fighting Uber's business model — common in the sharing economy — that classifies drivers as contractors instead of employees.

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