[JURIST] The California Labor Commission [official website] has ruled that drivers for the personal transportation service Uber [official website] are considered employees, not contractors. The ruling, which was handed down on June 3, only became known to the public [Reuters report] on Tuesday after Uber appealed it in state court in San Francisco. The commission had previously found in 2012 that Uber drivers are independent contractors due to factors such as the drivers being able to set their own hours. However, in this case the commission looked to other factors and found that Uber is involved in all aspects of operation, qualifying the drivers as employees. Uber said in a statement [press release], “It’s important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies.” The ruling could lead to higher costs for the company, as they may have to begin to pay for such benefits as workers’ compensation, Social Security and unemployment insurance.

Uber has faced a series of legal challenges in recent months. One lawsuit [Silicon Valley report] that was filed on December 9, 2014 alleges that Uber misleads consumers about their safety, overcharges them and completely disregards California law. San Francisco District Attorney George Gascon and Los Angeles County District Attorney Jackie Lacey stated [JURIST commentary], “Uber has refused to comply with straightforward California laws that protect consumers from fraud and harm… These companies can be innovative in the way they deliver services without ignoring the laws that protect the public.” Uber’s rival, Lyft, also based in San Francisco, settled [Time report] with the city for $500,000 over similar accusations of making “false and misleading statements” to consumers over adequate background checks on their drivers.