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California: Former Uber driver was an employee

In the battle over whether its drivers are independent contractors or employees, Uber has lost another skirmish.

The California Employment Development Department has determined that a former Uber driver in Southern California was an employee and not a contractor. Uber

Uber, the app-based ride-hailing service, classifies its drivers as independent contractors, not employees, but this position has been undermined yet again.

The California Employment Development Department (EDD), which administers the state's unemployment insurance benefits program, has determined that a former Uber driver in Southern California was an employee, Reuters reported.

The department's initial determination was based on an application for unemployment insurance benefits the former driver filed in April 2014, department spokeswoman Patti Roberts told CNET on Thursday.

Uber appealed the decision to an Administrative Law Judge of the California Unemployment Insurance Appeals Board, which affirmed the department's original determination, the EDD said.

Roberts said the decision creates no precedent, though. "There is no blanket ruling regarding Uber drivers," she said. "Each case is determined on its own merits."

San Francisco-based Uber said the same. "This decision applies to one person -- it does not have any wider impact or set any formal or binding precedent," an Uber spokesperson told CNET.

This case is the latest reflection of the controversy surrounding Uber's contractor-based business model, with the company insisting it is not a transportation service, but simply a matchmaker between riders and drivers. However, the latest decision could give drivers more fodder for taking legal action against Uber. It may also be good news for cab unions and non-Uber taxi drivers, who have protested around the world about the way Uber operates and undercuts them.

The latest decision is among several recent ones that conflict with how Uber designates its workers. According to Reuters, others came out of a Florida regulatory agency in May and via the California Labor Commissioner in June. Both of these are under appeal by Uber. According to an Uber spokesperson, labor or unemployment boards in nine states have found drivers on multiple occasions to be independent contractors: Georgia, Arizona, Pennsylvania, Colorado, Indiana, Texas, New York, Illinois and California.

In related news, US District Judge Edward Chen last week granted class action status to a lawsuit, originally filed in 2013, in which three drivers are suing Uber for classifying them as independent contractors rather than employees. Uber had filed a motion for the case's dismissal, which was denied in March, and then last month had filed a 52-page motion to limit the case to just the three drivers.

Uber, the highest-valued venture-backed company in the world, connects passengers with drivers via a smartphone app. Its current classification of drivers as contractors means the company is not responsible for costs such as Social Security, health insurance, paid sick days and overtime. Drivers also supply and maintain their own cars, so Uber doesn't pay for gas, repairs and other expenses. The company maintains that drivers are their own bosses and can drive as much or as little as they want, which makes them contractors rather than employees.