California Deems Uber Driver an Employee, Not a Contractor

In a recent ruling in response to a driver’s lawsuit, the California Labor Commission decided that an Uber driver is an employee rather than a contractor — a move that could change the way ride-sharing services operate in the state.

The Commission awarded over $ 4,000 to the driver named in the case. According to documents, the court ruled she was entitled to mileage and toll expenses for using her personal car for work purposes. This California Labor Commission ruling only applies to one specific Uber driver named in the case, but it could open the door for other claimants.

Classifying Uber drivers as employees could require the company to pay up Social Security, workers compensation, and healthcare benefits in the future. Uber maintains that its drivers are independent contractors, and that the service is “nothing more than a neutral technology platform” to facilitate transactions between drivers and riders.

The June 3 decision goes against an earlier ruling in 2012, in which the same commission decided that an Uber driver was a contractor. This decision was based on the ability of drivers to choose their own hours. But in the most recent ruling, the commission considered other factors, including Uber’s control over the tools drivers use to gain business and its ability to terminate drivers if their ratings fall below 4.6 stars. California’s decision contradicts rulings made in five other states, Uber says.

For now, Uber won’t have to change the way it does business because the company has appealed the decision, Reuters reports. But that could soon change. Not only may the decision affect car sharing services across the state, but it also has implications for just about every other crowdsourcing service that solicits contributions from a large network of workers.

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