Uber Drivers Are Employees California Labor Commissioner’s Office Rules

San Francisco, CAA landmark decision has been reached by the California Labor Commissioner’s Office, favoring Uber drivers who claim to be employees, not contractors. If upheld, Uber drivers would be entitled to health care benefits, worker’s compensation and payroll taxes, as well as reimbursable expenses such as gas and car maintenance, under California labor law.

The ruling could have far-reaching implications for the “share economy”. The Commissioner’s Office stated that Uber is more than a passive platform that connects drivers with riders, specifically, Uber is “involved in every aspect of the operation,” vetting drivers, setting standards and establishing non-negotiable rates. Additionally, Uber retains the right to remove drivers from using its service if customers give those drivers a low rating.

According to a report by Uber, it has in excess of 160,000 drivers across the US with California having the most drivers, in Los Angeles and San Francisco. The company was unsuccessful in arguing to the Commissioner’s Office that drivers using its ride-hailing smartphone app aren't employees because it doesn't set their hours or force them to pick up riders. It plans to appeal the decision.

While companies such as Uber and Lyft are relatively new, they are already facing California labor lawsuits alleging drivers for the businesses are misclassified as independent contractors when they should be considered employees, and therefore eligible for overtime, minimum wage and expenses.