California Labor Commissioner Ruling that Uber Driver is an Employee is a Potential Big Win for California Employees

The California Labor Commissioner’s ruling this week that Uber drivers must be considered employees, not independent contractors, is a big step forward for the rights of hundreds of thousands of drivers in California. Although this ruling applies only to the driver Barbara Ann Berwick, who brought this complaint, it paves the way for class action lawsuits that could force the company to fundamentally change the way it does business. 

California law expressly requires employers to reimburse employees for expenses they incur while working. However, these protections do not apply to “independent contractors,” who are not legally considered “employees” for the companies for which they work. Uber currently considers its hundreds of thousands of drivers nationwide to be independent contractors.

Under its business model, colloquially dubbed “ride-sharing,” Uber Technologies Inc. requires its drivers to use their own vehicles. This allows Uber to minimize its operating costs. As independent contractors, drivers bare the expenses of using their personal vehicles for their work. Essentially, this means that Uber is passing its operating costs onto its drivers.

The Labor Commissioner ordered Uber to reimburse driver Barbara Ann Berwick more than $4,000 for use of her personal vehicle during the eight weeks she drove for Uber. This ruling paves the way for future class action lawsuits that could extend California’s employee protections to Uber drivers throughout California.

Uber has 22,000 drivers in the San Francisco Bay Area alone. A statewide ruling that Uber drivers are employees would mean that the California employee protections would apply to Uber drivers, and require Uber to reimburse each of its California drivers for the costs they incur while driving their own vehicles. This would potentially be a significant financial hit to Uber.

Uber is appealing the Labor Commissioner’s ruling.

If you believe you have been wrongly classified as an independent contractor, or if you are an employee who believes you have not been reimbursed for business expenses, call the law office of Hunter Pyle Law for a free consultation, at 510.444.4400.