Labor Ruling Looks Like Bad News for Uber

California Labor Commission rules in case of Barbara Ann Berwick
By Newser Editors and Wire Services
Posted Jun 17, 2015 5:35 PM CDT
Labor Ruling Looks Like Bad News for Uber
David Plouffe, Uber senior vice president of policy and communications, at the opening of the new Uber offices Thursday, June 11, 2015, in Phoenix, Ariz.   (AP Photo/Ross D. Franklin)

A ruling in the case of a single Uber driver could have much broader implications for the popular ride-hailing service and for companies like it that rely on workers they see as independent contractors for on-demand services. The California Labor Commission has ruled that an Uber driver should be considered a company employee, not an independent contractor. The driver, Barbara Ann Berwick, filed a claim last year saying Uber owed her unpaid wages and other expenses. Uber has long contended that it is a technological platform used by independent drivers and their passengers to arrange and pay for rides. The commission, however, found that Uber acted like an employer, and the driver, like a delivery person for a pizza parlor, was an employee. It awarded Berwick $4,152.20 in expenses and interest.

For Uber, a privately held company valued at $40 billion, the case is clearly not about the money involved but about what it could mean for its long-term business model and how it is regulated. While Uber holds itself out as "nothing more than a neutral technological platform," it is in fact "involved in every aspect of the operation," the commission said in its June 3 ruling, which was filed yesterday. San Francisco-based Uber stressed that the ruling is non-binding and only applies to one driver. It is also appealing the decision, Reuters reports. The ruling is among legal challenges facing the company, along with Lyft, another ride-hailing service, from drivers seeking benefits and protections afforded to regular workers. (Read about an Uber driver who took down a Chicago gunman.)

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