Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business News

Former Uber driver awarded unemployment benefits

In California, a former Uber driver has been awarded unemployment benefits, even though Uber wants to classify them as independent contractors.



Huge ruling may have a ripple effect

In California, a former Uber driver has been awarded unemployment benefits, as the Employment Development Department has ruled that drivers are employees, even though Uber wants to characterize them as independent contractors.

Uber and several Uber-style copycat startups have faced legal disputes over whether their hires should be classified as independent contractors or regular employees – a distinction that effects workers’ rights and benefits. Earlier this summer we wrote about the downfall of Homejoy, a startup that, like Uber, used mobile apps to connect customers with service providers, in this case, house cleaners. The company closed its doors after a lawsuit ruled that its house cleaners were employees, not independent contractors. Startups Postmates and Try Caviar have both faced similar legal issues.

A former driver was awarded unemployment benefits back in April 2014

Uber appealed the decision, in November and again the following June. An administrative judge, and then the California Unemployment Insurance Appeals Board both ruled in favor of the driver. This isn’t the first time drivers were designated as employees, but it is the first time that Uber’s appeals have been denied. Although an Uber spokeswoman claims that the decision “does not have any wider impact or set any formal or binding precedent,” legal experts believe this recent case will lay the groundwork for future Uber drivers hoping to be classified as employees.

What makes an Uber driver and employee rather than an independent contractor? The company sets fares for drivers, and charges them a fee if they decline to pick up a ride. The company also prevents drivers from negotiating rides with riders not using the app, and has the prerogative to suspend or deactivate drivers’ accounts. All of these factors have led California to assert that Uber drivers are employees. Nonetheless, Georgia, Pennsylvania, Colorado, Indiana, Texas, New York, and Illinois all classify Uber drivers as independent contractors.

As more and more startups attempt to emulate Uber’s model, they will have to decide carefully about whether they are hiring employees or independent contractors.


Advertisement. Scroll to continue reading.

Ellen Vessels, a Staff Writer at The American Genius, is respected for their wide range of work, with a focus on generational marketing and business trends. Ellen is also a performance artist when not writing, and has a passion for sustainability, social justice, and the arts.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.



Business News

Unemployment improved more dramatically than expected, potentially throwing a wrench into the Fed's rate hike plan.

Opinion Editorials

(EDITORIAL) Some have predicted that due to company needs and employees’ desire for flexibility, and even COVID, freelance is the future of work. But...

Business News

(BUSINESS) If you drive for popular delivery services as a side hustle or your full-time job, check out how much you could save on...

Business News

(BUSINESS) Uber isn't new to in-app expansion, especially since its grocery and goods delivery service took off - now, Uber will let you choose...


The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.