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Uber, Photo (AP)[/caption]
The California Labor Commission ruled that drivers working under a software enabled cab service Uber are employees and not contractors.
The present policy in the company is that they employ new drivers under the category of third-party contractors and they function as a logistics company that provides the drivers with an access to customer demands and directions. In repeated attempts Uber has argued at various courts that it doesn't function as a transportation or taxi service, but in its place they run a software program which is tailored to meet the customer demands by providing them the service.
Labor commission's statement turns the tables for Uber, making it a startup in the transportation sector and not a logistics software company. This has led the company into various legal hassles as well increasing the amount of money they have to pay now to recruit the drivers directly and providing them with various benefits.
This decision will be a bit difficult for Uber to live with. Uber's main investment is its full-time employees that work on the field out of their corporate offices. Now if the drivers are given the designation of employees it is quite evident that it will change the entire business landscape of Uber as it will increase their capital investment. More than a million drivers use the Uber software platform across the globe.
Earlier in this year a Uber driver Barbara had filed a complaint over salary issues. She had claimed that she did not receive the payment in return for her work. While deciding on the complaint, the California Labor Commission decided that Uber is more of a startup in the transportation sector and not a logistics software company that matches supply with demand. The ruling ordered the company to reimburse Barbara Ann Berwick $4,152.20 in expenses and other.