You are using an older browser version. Please use a supported version for the best MSN experience.

California: Uber Driver Is an Employee, Not a Contractor

Motor Trend logo Motor Trend 6/18/2015 Kelly Pleskot

The California Labor Commission has ruled that an Uber driver is an employee rather than a contractor -- a decision 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.

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 ruling only applies to one specific Uber driver named in the case, but it could open the door for other claimants.

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.

Uber X App Screen Shot© Provided by MotorTrend Uber X App Screen Shot

For now, Uber won't have to change the way it does business since it has entered the appeal process.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. These companies include everything from cleaning services like Homejoy to grocery delivery company Instacart.

Source: Reuters


More from Motor Trend


image beaconimage beaconimage beacon