California Labor Commission: Uber Driver is an Employee
As reported in the New York Times, and elsewhere, a hearing officer for the California Labor Commissioner has ruled that Barbara Ann Berwick, an Uber driver, is an employee of Uber. The decision is getting widespread attention today because it is attached as an exhibit to Uber’s appeal of the decision. As does the federal court in O’Connor v. Uber, the Labor Commissioner here relies on the Borello test for employee status. Deploying that test, the Commissioner concludes that Berwick is an employee. What follows is the most relevant language of the Commission’s award, the full text of which we’ve linked here:
Defendants [Uber, Inc.] hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation. The reality, however, is that Defendants are involved in every aspect of the operation. Defendants vet prospective drivers, who must provide Defendants their personal banking and residence information, as well as their Social Security number . . . . Defendants control the tools the drivers use; for example, drivers must register their cars with the Defendants, and none of their cars can be more the ten years old. . . . Defendants monitor the Transportation Drivers’ approval ratings and terminate their access to the application if the rating falls below a specific level (4.6 stars). . . . The passengers pay Defendants a set price for the trip, and Defendants, in turn, pay their drivers a non-negotiable service fee. . . . Defendants discourage drivers from accepting tips because it would be counterproductive to Defendants’ advertising and marketing strategy. Plaintiff’s car and her labor were her only assets. Plaintiff’s work did not entail any ‘managerial’ skills that could affect profit or loss. Aside from her car, Plaintiff had no investment in the business. . . .
In light of the above, Plaintiff was Defendants’ employee.
Concluding Berwick is an employee, the Commission finds Uber liable for $4,152.20 for violations of various provisions of the California Labor Code, primarily the provision that requires employers to indemnify their employees for business expenses, here including millage that Berwick put on her car, tolls paid, etc.
As I’ve said before, I believe the facts in the Uber cases do reveal an employment relationship between Uber and its drivers. A federal judge agrees that these facts are sufficient to allow this question to go to a jury (as did a second judge in the Lyft litigation), and now the California Labor Commissioner has held as much.
One big question, of course, is how major a decision Berwick is. Time will tell, but it unquestionably is relevant. For one thing, Berwick contributes to a developing trend in Uber cases, pointing collectively in the direction of employment status. And because the federal courts in both the Uber and Lyft litigation are interpreting California employment law, the views of the California Labor Commission on what California law says and means has some particular relevance.
We’ll continue to provide updates as these cases develop.