The office that enforces California's labor statutes has ruled that Uber drivers are considered employees, and not independent contractors, a decision that could have wide-ranging implications for the nature of the so-called "sharing economy."
The decision on Wednesday comes from the case of Barbara Ann Berwick, who in September filed a claim with the California Labor Commission saying that she was owed wages by Uber that were unpaid, among other things. Berwick had used her own car to transport Uber customers, but Uber had provided the phone application necessary to conduct business. For the commission, that was enough to call Berwick Uber's employee.
Under the current model, most Uber drivers are considered independent contractors and are therefore usually not eligible for benefits like unemployment insurance, health insurance, or worker's compensation that "conventional" employees in the workforce are. The same goes for people who work for Lyft, another ride-sharing service, and AirBnb, a room-sharing company. All three are part of the sharing economy, an umbrella term for digital applications that allow people to rent services they typically already have.
California's ruling is part of a larger dispute about the nature of Uber drivers. Recently, Florida said a former Uber driver was considered an employee, and could therefore be eligible to collect unemployment insurance.