The California Labor Commission has ruled on the status of drivers for the app-based taxi service Uber, finding that they are employees, not contractors. The ruling dismissed arguments that the company is merely a neutral technology platform, instead finding it "is involved in every aspect of the operation."
The implications could be big for Uber, which could be valued at $50 billion if current fundraising efforts succeed. If it loses future appeals to the decision, it would potentially have to pay for unemployment insurance, Social Security, and worker's compensation. Though California is only one state, it's also one of Uber's biggest markets, so a ruling could set a precedent for others.
The case also has broader implications for similar app-based companies, which would prefer to use the contractor relationship to reduce labor costs, while workers would naturally prefer the opposite.