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Uber dealt blow in US court over 'employee' drivers Uber dealt blow in US court over 'employee' drivers
(about 1 hour later)
Uber drivers are employees not contractors, a US court has ruled, in a move that could mean higher costs for the app-based taxi service.Uber drivers are employees not contractors, a US court has ruled, in a move that could mean higher costs for the app-based taxi service.
The decision by the California Labor Commission, which was filed in a state court, disputes Uber's previous claims that its drivers are contractors. The decision by the California Labor Commission, which was filed in a state court, means a former driver must be awarded expenses.
It could mean extra costs such as social security, compensation and unemployment insurance. If applied more widely it could mean extra costs such as social security and unemployment insurance.
There could also be implications for firms with a similar business model. But Uber said the ruling only applied to this one driver.
Uber is "involved in every aspect of the operation", according to the ruling, which was sparked by a San Francisco-based Uber driver. In a statement, it said a previous ruling in California and other rulings in five other US states came to the opposite view, that drivers are contractors.
The company is now appealing against the award of $4,000 (£2,544) in expenses to the driver, Barbara Ann Berwick. "It's important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control.
The California Labor Commission said Uber would not exist without drivers like Ms Berwick, and that the company depends on the drivers' work. "The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies."
Uber has been arguing that is a "software platform" that "matches customer demand with supply". The company is now appealing against the award of $4,000 (£2,544) in expenses to the San Francisco former Uber driver, Barbara Ann Berwick.
The California Labor Commission ruled that Uber is not just enabling the service between drivers and passengers but is "involved in every aspect of the operation".
The commission said Uber would not exist without drivers like Ms Berwick, and that the company depends on the drivers' work.
Uber had been arguing that is a "software platform" that simply "matches customer demand with supply".