App-based taxi service Uber has been dealt another blow in a legal row that questions the status of its drivers and threatens its business model. It has emerged that a government body has already ruled that Uber drivers are employees not independent contractors.
The distinction is crucial because employees are entitled to a raft of benefits. It could strengthen the case for Uber drivers currently taking legal action against the company. The ruling emerged in court documents published by a lawyer representing the drivers – all based in San Francisco.
The California Employment Development Department (EDD) determined that a former Uber driver in southern California was an employee, not an independent contractor as the company had claimed.
Uber appealed against the decision, but both appeals were rejected – by an administrative law judge and then by the California Unemployment Insurance Appeals Board. The EDD decision is the third such ruling on the status of Uber – which has quickly become a huge issue for the company.
