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Uber on defensive in California following employment law ruling

Very smart and forward-thinking entrepreneurs are a focal point of American business thus far in the 21st century, with Travis Kalanick being a case in point.

Kalanick's brainstorm several years ago was Uber, the California company he founded to compete with traditional business models defining the taxi industry. Uber uses a proprietary smarthphone app to link consumers directly with cabs, with drivers having access to the app picking up passengers and collecting fees.

Uber has always -- and steadfastly -- maintained that the drivers are independent contractors. The argument contending that points centrally to the flexibility that drivers have via the Uber app, not being confined to a work-day clock and being able to use their own cars for conveyance.

Uber's take on the contractor-versus-employee status has prevailed in several states, but it might now be under growing pressure nationally given a recent ruling issued by the California Labor Commissioner's Office.

California most decidedly disagrees with the notion that drivers using Uber's app are independent contractors. The commissioner's ruling noted that drivers' phones are provided by Uber and that company policy dictates app deactivation in a given case if a driver doesn't comply with a set policy.

That points to an employer/employee relationship, stated the commissioner, with the reality being "that defendants are involved in every aspect of the operation."

It is the degree of overall control exercised by an employer that is routinely dispositive in a contractor-or-employee dispute.

Uber understandably objects to the ruling, which demanded that the company pay a former driver expenses and related costs applicable to her tenure as an Uber driver. The company is appealing the decision.

As noted by the New York Times, the ruling "could bolster class-action lawsuits against the company" in California..

Source: The New York Times, "California says Uber driver is employee, not a contractor," Mike Isaac and Natasha Singer, June 17, 2015