(Bloomberg) — California's labor commissioner said an Uber Technologies Inc. driver must be considered an employee of the app-based ride service, which has been meeting resistance from regulators and cabbies as it seeks to expand worldwide.
The decision, which was filed in San Francisco state court Tuesday, is the latest threat to Uber's business model, which treats drivers as contractors rather than employees.
The ruling stemmed from a wage dispute with a former driver. San Francisco-based Uber, which provides mobile-phone applications to connect riders to rides, claimed the driver was an independent contractor and not entitled to recover claimed wages or expense reimbursement. The commissioner disagreed.
"The 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 commissioner said in the decision, which was filed alongside Uber's notice of appeal. "The reality, however, is that defendants are involved in every aspect of the operation."
The commissioner said the company dictates such things as how old a driver's car can be and who is qualified to offer services through the Uber platform.
Federal judges in San Francisco had refused to throw out driver lawsuits raising similar claims against Uber and its rival Lyft Inc., saying the matter is best left to a jury to decide.
The state court filing is Uber Technologies Inc. v. Berwick, 15-546378, Superior Court of California, County of San Francisco. The federal cases are Cotter v. Lyft Inc., 13-cv-04065, and O'Connor v. Uber Technologies Inc., 13-cv-03826, U.S. District Court, Northern District of California (San Francisco).
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.