California’s labor commission has decided that one of Uber’s drivers is an employee and not an independent contractor. Uber, a ride-hailing service and popular app, may have to change its business model in the state. While the ruling was made in March, it has now become public due to Uber filing an appeal.
Classifying the drivers as contractors has allowed Uber to avoid paying for Social Security tax, paid sick days, health insurance, car maintenance and gas along with other expenses. Uber will be obligated to pay for these expenses if their drivers are defined as employees, and the effects could be felt by customers as well as set a precedent for future lawsuits.
Article via CNET, 17 June 2015