As The New York Times reports, the California Labor Commissioner has ruled that a driver for Uber is an employee of the company.
Why this matters: The commissioner made the determination using tests very similar to the ones the IRS uses in determining whether someone is an employee or an independent contractor. Employees are potentially entitled to worker’s compensation, unemployment coverage, and a host of other benefits not available to the self-employed.
This case cannot be cited as precedent for other Uber drivers who would like to be treated as employees. But once the taxing authorities get interested in the conditions under which contractors–or are they employees–in the so-called ‘sharing economy’ work, you can bet the Ubers, Lyfts, and other companies who currently boast high prospective market values and few employees are rightly going to be on high alert. It’ll be interesting to see if the sharing economy includes sharing the responsibilities for employment taxes, at-work injuries, and other costs that independent contractors otherwise have to fully shoulder.