COURT: Uber Drivers Are Employees
In a ruling that could significantly raise costs for ride-hailing companies like Uber and Lyft, the California Labor Commission ruled this week that a driver who filed a complaint against Uber Technologies was an employee, not an independent contractor. The driver, Barbara Berwick, was awarded a mere $4,152 — chump change for Uber. But the technology giant is appealing the ruling because it could significantly increase the $40 billion startup's costs. Uber currently saddles its drivers with major vehicle costs — including the vehicle itself, maintenance, insurance and gas — by labeling its drivers independent contractors rather than employees. If Uber is forced to treat drivers as employees, it could bear a greater share of those costs, which will eat into its profits. Uber has consistently held its global fleet of drivers at arms length by claiming it is merely matching drivers with riders. But the California Labor Commission this week said Uber also maintains a good deal of control over its drivers, which makes it more of an employer than "a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation."Uber plans to appeal the ruling, which they say is "non-binding and only applies to one driver."