Calif. regulator says Uber driver is an employee

A California labor regulator has ruled that an Uber driver was an employee, not a contractor, when she worked for the company last year.

{mosads}California’s labor commissioner said in the ruling that Uber is “involved in every aspect of the operation.”

The regulator also found that drivers are integral to Uber’s business, another potential test for an employer-employee relationship.

“Without drivers such as Plaintiff, [Uber’s] business would not exist,” the ruling said.

The decision adds fuel to a debate that could have a significant effect on Uber’s business. At issue is how much control employers like Uber have over their workers.

The commission ordered Uber to pay the former driver, Barbara Ann Berwick, $4,152.20 in requested compensation.

Uber has appealed the ruling in court and said it is “non-binding and applies to a single driver.”

“Indeed it is contrary to a previous ruling by the same commission, which concluded in 2012 that the driver ‘performed services as an independent contractor, and not as a bona fide employee,’ ” the company said in a statement. “It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.”

Because they are not full employees, Uber’s drivers do not receive benefits like unemployment, which saves the company money.

Advocates say that because drivers are screened, trained and subject to a disciplinary system, they are closer to employees than contractors.

Contract workers have enabled the rapid growth of Uber and other on-demand economy companies like Airbnb. Though the debate over the workers’ status is most highly pitched in the ridesharing industry, other tech startups also use a workforce comprised of contractors

A regulator in Florida ruled in May that an Uber driver was an employee, though that ruling may not apply outside of the man’s specific case. The California ruling similarly does not immediately re-classify all Uber drivers as full employees.

The question is also winding its way through federal court. Lawsuits filed by Uber and Lyft drivers who say they are employees will go before juries, two judges ruled this year. If those cases were decided in favor of employees, it could set a much broader precedent with wide effects on the growing on-demand services industry.

The debate over Uber’s workers comes at a pivotal time for the company. It is reportedly raising money at a $50 billion valuation as it tries to expand into delivery services that could put it in competition with shipping services.

Lawmakers have also started to take notice of the labor questions posed by the on-demand economy.

Sen. Mark Warner (D-Va.) has proposed a slate of policies aimed at creating a social safety net for workers at companies like Uber and Airbnb. He said the California ruling was evidence that the current regulatory system was insufficient.

“Today’s ruling from the California labor regulators demonstrates why federal policymakers need to reexamine the 20th Century definitions and employment classifications we’re attempting to apply to a 21st Century workforce,” he said in a statement.

Warner has suggested he will introduce legislation on the topic but has declined to say when he will do so.

Advocates believe that the ruling is part of a growing pattern of evidence that the companies must treat their workers like employees.

“There will be appeals, but at some point the Ubers of the world will have to recognize that it’s ‘game over’ for denying that these workers are their employees,” said Rebecca Smith, the deputy director of the National Employment Law Project, in an email.

California labor commissioner's ruling

–This report was updated at 2:10 p.m.