Uber drivers scored a victory Tuesday when a federal judge ruled that they could move forward with a class-action lawsuit that seeks to designate them as employees, not independent contractors.

The LA Times reports that U.S. District Judge Edward Chen in San Francisco ruled for the plaintiffs, denying the on-demand transportation company’s motion for a quick judgment and allowing the lawsuit to proceed as a class action.

The decision could have deep implications for Uber and other companies in the fast-growing on-demand economy, in which customers use smartphone apps to order services such as car rides and home delivery of groceries and restaurant food.

Uber now stands to lose far more than if the case had proceeded as a suit involving only three plaintiffs. In addition to potentially being on the hook for back wages, sick leave, expenses and benefits such as workers’ compensation coverage, the company could be ordered to pay gratuities owed to thousands of former drivers. And that doesn’t even touch on what a loss would mean for Uber’s independent contractor-reliant business model, which has earned the company a $50-billion valuation.

Plaintiff lawyer Shannon Liss-Riordan, who is also representing Lyft drivers in a separate class-action lawsuit against Lyft, Uber’s top competitor, said in a prepared statement that Chen’s decision Tuesday was a “major victory” for Uber drivers. The class however is not as big as Liss-Riordan had hoped the judge would certify. The certified class excludes current and recent Uber drivers bound by Uber’s 2014 arbitration clause. And one of the three plaintiffs, Thomas Colopy, was also found to not qualify. An Uber spokesperson said this leaves them with only a “tiny fraction of the class [of 160,000] the plaintiffs were seeking.”

A trial date has not yet been set. Uber’s spokesperson said the company plans to appeal.