Here's one thing that could stop Uber in its tracks faster than any anti-Uber cabbie demonstration: Worker's benefits. A California labour commission has ruled that Uber drivers aren't actually independent contractors, but are Uber employees who are owed a whole lot of back pay and benefits by the San Francisco-based company.
The decision was issued in San Francisco in the case of Uber driver Barbara Ann Berwick. The company claimed she had no right to wages or expense reimbursements for mileage and tolls that she claimed because she's a contractor. It's her responsibility to provide the service, collect a fee and cover her expenses, said Uber. But the California labour commission ruled that she is an employee because her services are "integral" to Uber's business of providing transportation to clients.
Just like a traditional boss, Uber is involved in "every aspect of the operation,"" and employment, the order said, including vetting drivers, requiring them to provide banking and Social Security information, conducting DMV and background checks, and only allowing drivers to use cars that are less than 10 years old — and registered with Uber.
The ruling could cost the discount taxi service big bucks. The company would have to pay wages, and reimburse drivers for gas, tolls and insurance, and would have to cover unemployment insurance, workers' compensation, Social Security and other benefits.
Uber insisted in a statement that the ruling is "nonbinding" and only applies to a "single driver."
"Obviously it has repercussions beyond one driver," said Boston attorney Shannon Liss-Riordan, who's representing Uber and Lyft drivers in class-action lawsuits over the same issue. "It's clear the reasoning applies to Uber's business model in general," she told the Los Angeles Times.
If the state court affirms the commissioner's ruling it could set a legal precedent.