California has ruled that an Uber driver in the state should be classified as an employee instead of an independent contractor in what could be a landmark case for the transportation company and other so-called on-demand companies.
The California Labor Commission made the ruling in March, but it did not become known until Tuesday, when Uber filed on appeal of the decision, according to the New York Times.
The Labor Commission ordered Uber to reimburse former driver Barbara Ann Berwick $4,152.20 for costs borne during her time with the company, like mileage and tolls.
If Uber loses its appeal, this case could set precedent that could drastically change the way the company operates. Employee status could mean that Uber would have to add drivers to company payroll, consider vacation and benefits, and pay drivers a steady paycheck.
It would also mean that Uber likely would have to pay additional taxes and insurance premiums.
Uber maintains it is a “logistics company” that uses an app to connect drivers and would-be passengers who engage in a private transaction. Opponents say the company is essentially a transportation fleet with thousands of drivers.
An Uber spokeswoman said the Labor Commission made the opposite decision in 2012 and that the recent decision is non-binding.
Uber treats drivers like contractors in the sense that it does not schedule specific hours for drivers to work or require a minimum number of shifts.
But it acts like an employer by providing drivers with company phones that they must use while driving and deactivating drivers who haven’t worked in 180 days.
”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 ruling says, according to the Times. “The reality, however, is that defendants are involved in every aspect of the operation.”
Follow @PaytonGuion on Twitter.