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Former Uber Driver Was An Employee, Rules California Department

Uber has lost another legal round in the dispute over whether its drivers are independent contractors or employees, an issue that threatens the core of the ride-hailing company's business model.

The California Employment Development Department (EDD) determined that a former Uber driver in Southern California was an employee, not an independent contractor as the company has claimed, and the decision was upheld twice after Uber appealed by both an administrative law judge and the California Unemployment Insurance Appeals Board.

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The board's ruling came from its Inglewood office in August. The case came to light when a lawyer suing Uber on behalf of other drivers posted documents to her website.

The EDD decision is the third such ruling that appears to undercut how San Francisco-based Uber operates, relying on independent contractors to transport passengers.

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The other two were by a Florida regulatory agency in May and the California Labor Commissioner in June.

More significantly, this is the first of those cases to be appealed and have those appeals denied, foreshadowing how other appeals may be handled, some legal experts say.

In the Inglewood case, a former Uber driver, whose name was withheld from case documents, applied for unemployment benefits in April 2014.