A ruling from the California Labor Commission is that at least one driver at Uber driver is its employee. The startup had been sued by Barbara Ann Berwick, who filed a claim earlier in the year when she said she was not paid for work she had done. It is through that lawsuit that the California Labor Commission has come to decide that Uber is not solely a software company meeting consumer demand.
That update will likely change how Uber has up until now been describing its employees as third-party contractors. Previously Uber has maintained in court that it is a software platform offering supply to meet consumer demand. However the opposing side has traditionally argued Uber is a taxi business.
With this new ruling, Uber may also have to change how it brands itself. It is now a transportation startup, not a software business that meets demand in numbers. The result will have to be a major shift to its business model. Another result would be that Uber will now have to hire directly its drivers and, with that, comes paying benefits to them too. Given that Uber has over a million drivers across the world, this is a hard hit.
Since the decision was made, Uber has filed an appeal of it. The appeal was officially filed on June 16. Currently, the decision is only binding to the one employee Berwick, but it could go on to apply to more drivers in the future, depending what other legal issues Uber faces. Other monetary issues may endanger the startup and create a precedent for other ride-sharing businesses.
Uber is based in San Francisco. It brands itself as meeting at where lifestyle joins logistics, providing safe, efficient transportation to people in cities around the globe. Its founders are Garrett Camp and Travis Kalanick.
