Labor Ruling Looks Like Bad News for Uber

A ruling in the case of a single Uber driver could have much broader implications for the popular ride-hailing service and for companies like it that rely on workers they see as independent contractors for on-demand services. The California Labor Commission has ruled that an Uber driver should be considered a company employee, not an independent contractor. The driver, Barbara Ann Berwick, filed a claim last year saying Uber owed her unpaid wages and other expenses. Uber has long contended that it is a technological platform used by independent drivers and their passengers to arrange and pay for rides. The commission, however, found that Uber acted like an employer, and the driver, like a delivery person for a pizza parlor, was an employee. It awarded Berwick $4,152.20 in expenses and interest.

For Uber, a privately held company valued at $40 billion, the case is clearly not about the money involved but about what it could mean for its long-term business model and how it is regulated. While Uber holds itself out as "nothing more than a neutral technological platform," it is in fact "involved in every aspect of the operation," the commission said in its June 3 ruling, which was filed yesterday. San Francisco-based Uber stressed that the ruling is non-binding and only applies to one driver. It is also appealing the decision, Reuters reports. The ruling is among legal challenges facing the company, along with Lyft, another ride-hailing service, from drivers seeking benefits and protections afforded to regular workers. (Read about an Uber driver who took down a Chicago gunman.)