According to Twitter, a California Labor Law Court has ruled that an Uber driver is an employee under California law and is entitled to reimbursements for expenses and other fees and costs an employee is entitled to. The decision is a blow to Uber, who has based its entire business plan on the specification that the drivers that provide transportation are independent contractors. An independent contractor would be responsible for their own taxes and would not be entitled to reimbursements for actions performed during the scope of their service to the company. Attorneys for Uber are reviewing the ruling as it would have global implications on the companies operations and its business model.California Labor Court Rules Uber Driver An Employee And Not An Independent Contractor
The ruling could be appealed but the leal team for Uber could decide on a less public option which could include a confidentiality agreement.
Uber has run into opposition in many cities and countries who are supporting their taxi cab medallion system. Uber is a direct threat to the fees collected by the issuing authorities as well as to the taxi drivers who operate under the medallion system. Uber’s argument that it is not a taxi cab service rests with the fact that it claims all of its drivers are independent contractors and that this type of activity cannot be regulated by the state. Uber expects to face similar challenges in other States.
It looks like Uber is trying to expand its business into more delivery options. Earlier this week the company started offering food delivery in some locations and now it looks like they’re also testing some other forms of delivery. Specifically, the company is looking at giving high-end retailers the ability to use Uber to deliver goods to customers quickly. Some of the stores reportedly in talks with Uber for the service include Tiffany’s, Louis Vuitton, and Neiman Marcus. With the service Uber drivers would be carrying around cargo as well as people, and would simply pick up that diamond ring or fancy suit on their way to retrieve another passenger.
If successful, Uber could create a program that rivals that of eBay and Amazon’s same-day services. Handy from Consumer Reports likes the idea since Uber already has drivers on the road, it will cut down considerably on the cost of hiring drivers and paying for vehicles. Even if drivers are paid the same amount as carrying around a human passenger, something like $20 to get that $2000 suit driven across town is a no-brainer for many wealthier clients who would rather not head downtown to pick something up but would appreciate receiving product the same day they buy it.