Uber – the transportation networking company which, through the use of its technological platform and smart phone application, connects consumers (passengers) with transportation providers (private vehicle drivers) and facilitates the ride sharing service – may be the next victim of the continuing wave of employee misclassification lawsuits sweeping the nation. On June 3, 2015, in Berwick v. Uber Technologies, the California Labor Commissioner ruled that an Uber driver in California is an employee, and not an independent contractor, of the ride-hailing company. In relevant part, the labor commission found that “the minimal degree of control that [Uber] exercised over the details of the work was not considered dispositive because the work did not require a high degree of skill and it was an integral part of the employer’s business” and that, in reality, Uber is “involved in every aspect of the operation.” As a result, Uber was ordered to reimburse its driver’s legitimate, reimbursable expenses pursuant to California Labor Code § 2802.
Though the decision of the California Labor Commission is not binding – Uber already has appealed – the lawsuit and underlying decision are significant. The decision is symbolic in that it jeopardizes Uber’s contractor-based business model. Uber maintains that it is “nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation.” Given the Commissioner’s ruling and the overarching and virtually universal presumption of employment, courts may not agree with Uber.