Barcelona Cabs Strike Against Uber Taxi App
  • Barcelona Cabs Strike Against Uber Taxi App
  • BARCELONA, SPAIN - JULY 01: In this photo illustration, the app 'Uber' is launched in a smart phone on July 1, 2014 in Barcelona, Spain. Taxi drivers in main cities strike over unlicensed car-halling services. Drivers say that is a lack of regulation behind the new app. (Photo Illustration by David Ramos/Getty Images)
  • Image Credit: David Ramos via Getty Images
Mideast Egypt Uber
  • Mideast Egypt Uber
  • Anthony Khoury, head of Middle East and Africa expansions for Uber, displays the application on a mobile phone during an event to celebrate the official launch of the car-hailing service in Cairo, Egypt, Tuesday, Feb. 10, 2015. Cairo soft launched the company in Nov. 2014. Uber is now in over 270 cities in 55 countries, according to the company. (AP Photo/Mosa'ab Elshamy)
  • Image Credit: ASSOCIATED PRESS
Uber Lyft Employees or Contractors
  • Uber Lyft Employees or Contractors
  • In this photo taken Tuesday, Dec. 16, 2014, a man leaves the headquarters of Uber in San Francisco. (AP Photo/Eric Risberg)
  • Image Credit: ASSOCIATED PRESS
Uber Surge
  • Uber Surge
  • This Friday, Nov. 21, 2014, photo taken in Newark, N.J., shows smartphones displaying Uber car availability in New York. Uber is offering car service in 250 cities in 50 countries now, up from 60 cities in 21 countries just a year ago. Uber hasn’t released its financial figures to the public, so valuing the company is pure guesswork. (AP Photo/Julio Cortez)
  • Image Credit: ASSOCIATED PRESS
Uber Launch-Nevada
  • Uber Launch-Nevada
  • Uber West Coast Regional Manager William Barnes sits in the back of a car during a photo shoot Friday, Oct. 24, 2014, in Las Vegas. The ride sharing company has begun operations in Nevada. (AP Photo/John Locher)
  • Image Credit: ASSOCIATED PRESS
India Uber Asia
  • India Uber Asia
  • In this April 3, 2014 photo, a smartphone is mounted on the glass of an Uber car in Mumbai, India. Riding on its startup success and flush with fresh capital, taxi-hailing smartphone app Uber is making a big push into Asia. The company has in the last year started operating in 18 cities in Asia and the South Pacific including Seoul, Shanghai, Bangkok, Hong Kong and five Indian cities. (AP Photo/Rafiq Maqbool)
  • Image Credit: ASSOCIATED PRESS
INDIA-CRIME-RAPE-TRANSPORT-UBER
  • INDIA-CRIME-RAPE-TRANSPORT-UBER
  • The Uber smartphone app, used to book taxis using its service, is pictured over a parking lot as auto-rickshaws (background) ply a road in the Indian capital New Delhi on December 7, 2014. An Uber taxi driver allegedly raped a 25-year-old passenger in the Indian capital before threatening to kill her, police said December 7, in a blow to the company's safety-conscious image. AFP PHOTO/TENGKU BAHAR (Photo credit should read TENGKU BAHAR/AFP/Getty Images)
  • Image Credit: TENGKU BAHAR via Getty Images
Grand Tasting Presented By ShopRite Featuring KitchenAid® Culinary Demonstrations Presented By MasterCard - Food Network New York City Wine & Food Festival Presented By FOOD & WINE
  • Grand Tasting Presented By ShopRite Featuring KitchenAid® Culinary Demonstrations Presented By MasterCard - Food Network New York City Wine & Food Festival Presented By FOOD & WINE
  • NEW YORK, NY - OCTOBER 18: A general view of atmosphere at the Uber Technologies station at the Grand Tasting presented by ShopRite featuring KitchenAid® culinary demonstrations presented by MasterCard during the Food Network New York City Wine & Food Festival Presented By FOOD & WINE at Pier 94 on October 18, 2014 in New York City. (Photo by Bryan Bedder/Getty Images for NYCWFF)
  • Image Credit: Bryan Bedder via Getty Images
Uber Taxi App In Madrid
  • Uber Taxi App In Madrid
  • MADRID, SPAIN - OCTOBER 14: In this photo illustration the new smart phone taxi app 'Uber' shows how to select a pick up location at Atocha Station on October 14, 2014 in Madrid, Spain. 'Uber' application started to operate in Madrid last September despite Taxi drivers claim it is an illegal activity and its drivers currently operate without a license. 'Uber' is an American based company which is quickly expanding to some of the main cities from around the world. (Photo by Pablo Blazquez Dominguez/Getty Images)
  • Image Credit: Pablo Blazquez Dominguez via Getty Images
Uber Taxi App In Madrid
  • Uber Taxi App In Madrid
  • MADRID, SPAIN - OCTOBER 14: In this photo illustration the new smart phone taxi app 'Uber' shows how to select a pick up location at Puerta de Alcala Square on October 14, 2014 in Madrid, Spain. 'Uber' application started to operate in Madrid last September despite Taxi drivers claim it is an illegal activity and its drivers currently operate without a license. 'Uber' is an American based company which is quickly expanding to some of the main cities from around the world. (Photo by Pablo Blazquez Dominguez/Getty Images)
  • Image Credit: Pablo Blazquez Dominguez via Getty Images
Uber Taxi App In Madrid
  • Uber Taxi App In Madrid
  • MADRID, SPAIN - OCTOBER 14: In this Photo Illustration a smart phone displays a picture with the logo of the news taxi app 'Uber' as people walk past on October 14, 2014 in Madrid, Spain. 'Uber' application started to operate in Madrid last September despite Taxi drivers claim it is an illegal activity and its drivers currently operate without a license. 'Uber' is an American based company which is quickly expanding to some of the main cities from around the world. (Photo Illustration by Pablo Blazquez Dominguez/Getty Images)
  • Image Credit: Pablo Blazquez Dominguez via Getty Images
Uber Taxi App In Madrid
  • Uber Taxi App In Madrid
  • MADRID, SPAIN - OCTOBER 14: In this photo illustration the new smart phone taxi app 'Uber' shows how to select a pick up location at Atocha Station on October 14, 2014 in Madrid, Spain. 'Uber' application started to operate in Madrid last September despite Taxi drivers claim it is an illegal activity and its drivers currently operate without a license. 'Uber' is an American based company which is quickly expanding to some of the main cities from around the world. (Photo by Pablo Blazquez Dominguez/Getty Images)
  • Image Credit: Pablo Blazquez Dominguez via Getty Images
Uber Taxi App In Madrid
  • Uber Taxi App In Madrid
  • MADRID, SPAIN - OCTOBER 14: In this Photo Illustration a smart phone displays a picture with the logo of the news taxi app 'Uber' outside Plaza de Toros Las Ventas on October 14, 2014 in Madrid, Spain. 'Uber' application started to operate in Madrid last September despite Taxi drivers claim it is an illegal activity and its drivers currently operate without a license. 'Uber' is an American based company which is quickly expanding to some of the main cities from around the world. (Photo Illustration by Pablo Blazquez Dominguez/Getty Images)
  • Image Credit: Pablo Blazquez Dominguez via Getty Images
Uber Taxi App In Madrid
  • Uber Taxi App In Madrid
  • MADRID, SPAIN - OCTOBER 14: In this photo illustration the new smart phone taxi app 'Uber' shows how to select a pick up location next to a taxi lane on October 14, 2014 in Madrid, Spain. 'Uber' application started to operate in Madrid last September despite Taxi drivers claim it is an illegal activity and its drivers currently operate without a license. 'Uber' is an American based company which is quickly expanding to some of the main cities from around the world. (Photo by Pablo Blazquez Dominguez/Getty Images)
  • Image Credit: Pablo Blazquez Dominguez via Getty Images
German Court Bans Uber Service Nationwide
  • German Court Bans Uber Service Nationwide
  • BERLIN, GERMANY - SEPTEMBER 02: In this photo illustration, a woman uses the Uber app on an Samsung smartphone on September 2, 2014 in Berlin, Germany. Uber, an app that allows passenger to buy rides from drivers who do not have taxi permits, has had its UberPop freelance driver service banned in Germany after a complaint by Taxi Deutschland, a trade association of taxi drivers in the country. The company, which operates in 42 countries over 200 cities worldwide, plans to both appeal the decision made by a court in Frankfurt as well as, at the risk of heavy fines, continue its services in Germany until a final decision has been made on the matter. (Photo by Adam Berry/Getty Images)
  • Image Credit: Adam Berry via Getty Images
A ruling in the case of a single Uber driver could have much broader implications for the popular ride-hailing service and for companies like it that rely on workers they see as independent contractors for on-demand services. The California Labor Commission has ruled that an Uber driver should be considered a company employee, not an independent contractor.

The driver, Barbara Ann Berwick, filed a claim last year saying Uber owed her unpaid wages and other expenses. Uber has long contended that it is a technological platform used by independent drivers and their passengers to arrange and pay for rides.

The commission, however, found that Uber acted like an employer, and the driver, like a delivery person for a pizza parlor, was an employee. It awarded Berwick $4,152.20 in expenses and interest.

For Uber, a privately held company valued at $40 billion, the case is clearly not about the money involved but about what it could mean for its long-term business model and how it is regulated.

While Uber holds itself out as "nothing more than a neutral technological platform," it is in fact "involved in every aspect of the operation," the commission said in its June 3 ruling, which was filed on Tuesday.

San Francisco-based Uber stressed that the ruling is non-binding and only applies to one driver. It is also appealing the decision.

"(It) is contrary to a previous ruling by the same commission, which concluded in 2012 that the driver 'performed services as an independent contractor, and not as a bona fide employee.' Five other states have also come to the same conclusion," Uber said in a statement.

The ruling is among legal challenges facing the company, along with Lyft, another ride-hailing service, from drivers seeking benefits and protections afforded to regular workers. But they are not the only regulatory hurdles the companies face. In New York City, the companies are battling efforts to regulate their apps, saying the efforts stall innovation and threaten competition

Currently, the companies treat drivers as independent contractors, which means they don't have to pay benefits. Classifying the workers as employees could raise the companies' expenses significantly — and would go against the heart of their business model and identity. Their selling points for attracting drivers are couched in ideas like freedom and autonomy.

"It's important to remember that the number one reason drivers choose to use Uber is because they have complete flexibility and control. The majority of them can and do choose to earn their living from multiple sources, including other ride sharing companies," Uber said.

The AP contributed to this report.

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