A California Labor Ruling Just Said Uber Drivers Are Employees. That’s Uber’s Worst Nightmare.

Slate reports:

In what could be an explosive decision, the California Labor Commission has found that a driver for Uber in San Francisco is an employee of the company. That’s from a ruling filed in state court on Tuesday and first reported by Reuters. It’s pretty damning. “Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the commission writes. “The reality, however, is that Defendants are involved in every aspect of the operation.”

The driver, Barbara Berwick, has been awarded roughly $4,000 in unpaid expenses, plus interest. Uber is appealing the ruling. The company didn’t immediately respond to requests for comment.


The threat that Uber’s drivers could be deemed employees in the eyes of the law has loomed over the ride-hailing company for a while now—and it’s a big one. Uber’s vast business and multi-multibillion dollar valuation fundamentally depends on its assumption that drivers are independent contractors, and not employees. When drivers are treated as contractors, they carry the bulk of the company’s operating costs. Uber drivers are required to pay out of pocket for everything from gas to insurance to routine car cleanings and maintenance. It adds up fast. While Uber has boasted that drivers in certain markets like New York City can earn as much as $90,000 driving on its platform, after expenses are added into the mix, that take-home figure gets much lower.

Just as importantly, drivers who are contractors, and not employees, also aren’t required to get benefits and other labor protections that employees are traditionally awarded. For Uber and all its peers in the so-called 1099 economy

The taxi cartel strikes back were their bureaucrats on the "pad".