Today, the California Labor Commission announced its ruling, filed in a state court on Tuesday, that Uber drivers are employees — not independent contractors. While the ruling affects only California, many sharing-economy companies are based in California, which is also their biggest market.
“This ruling will have a chilling effect on the entire sharing economy,” said Berin Szoka, President of TechFreedom. “The independent-contractor business model helped drive the success of Uber, Lyft, Airbnb, and other sharing-economy companies. The Commission’s ruling could force sharing-economy companies to scale back their offerings and increase prices, which could also rob consumers of the flexibility and broad range of choices currently offered by these companies.”
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