Uber drivers win victory on unemployment insurance

In what could be a precedent-setting decision, the New York State labor review board has ruled that three former Uber drivers—as well as all “similarly situated” drivers—were Uber employees when it comes to the issue of unemployment insurance.

Politico reports that worker advocates say the decision is a major victory and could possibly affect Uber drivers elsewhere in the state—as well as the gig economy itself.

Uber fought the decision tooth and nail—the question of whether Uber drivers, or Postmates coffee deliverers, are for the purposes of unemployment insurance independent contractors or employees with benefits like unemployment insurance—and has exhausted all potential challenges to it within the labor department. If Uber wants to go farther, it will have to take up the issue in state court.

Related: Pending legal challenges for the gig economy

In 2016 former Uber drivers found that their unemployment insurance claims took months instead of the typical three to six weeks. When one inquired, the driver was told, via e-mail, that claims like his were “under executive review, which means the Dept. of Labor is not making the decision whether or not this employment is covered. Your claim will remain pending until such time as a determination has been made.”

That resulted in the launch of the lawsuit, and when the initial ruling came down in favor of the drivers, Uber appealed—and then later tried to cancel its appeal, lest, according to employment law experts, the final decision should affect its entire business model. Employment law attorney David Raff said that the attempt to cancel the appeal showed a “disdain for the system” and a willingness to “waste everyone’s time and resources.”

The board refused to allow Uber to withdraw its appeal and rejected its argument.

Politico also cites New York Taxi Workers Alliance Executive Director Bhairavi Desai saying, “We won and they lost.” The Alliance has characterized the decision, it says, as “broadly precedential” and creating a new “safety net” for workers.

Raff also told Politico that’s a “fair interpretation,” and added, “It will be interesting to see if Uber now starts to develop a new model, or wants to contest this, or accepts the fact that as far as New York is concerned, [drivers] will be employees in most instances” regarding unemployment insurance.

In a statement on behalf of Uber, spokeswoman Alix Anfang said, “We disagree with this ruling and we are reviewing our options.” She adds, “We are confident that the ruling uniquely applies to the three claimants because many of the practices cited in the opinion never applied to one or more of the claimants, are no longer in place, or never existed at all.”

However, Desai said of the decision, “It’s huge. It’s really significant, because it’s the first bona fide safety net for drivers in this economy … We now have a decision that reflects the official position of the state, one that the state has to defend and execute.”