Two former Uber drivers eligible for unemployment payment: New York State labour department

New York State regulators have ruled two former drivers for Uber were eligible for unemployment payment, finding that they should be treated as employees rather than independent contractors, as the company had maintained, The New York Times reported.

Unlike contractors, employees enjoy a variety of rights and protections, including a minimum wage and workers' compensation insurance, and are typically more costly for companies to rely on.

With the decision, it could become more difficult for Uber, and rivals like Lyft ato operate in what had come to be known as the gig economy. The decision was also likely to hit their costs and challenge their business model, according to commentators.

The rulings by the New York State Department of Labor were sent to the two Uber drivers (one also worked for Lyft) in August and September but had not been reported.

They applied to only their unemployment insurance claims and did not directly affect other drivers or extend to other protections normally enjoyed by employees.

However, worker advocates said they planned to pressure the state to extend the logic of the unemployment rulings to other areas.

''I think this is a game-changer,'' said Bhairavi Desai, executive director of the New York Taxi Workers Alliance, which filed a federal lawsuit with the two drivers in July to force the Labor Department to make a determination in their cases The New York Times reported.

According to commentators, as the rulings were not public, it was impossible to know why some drivers were considered eligible but others weren't.

Overall, legal experts pointed out that the New York rulings did not set legal precedent as jobless benefits were determined on a case-by-case basis and at the state level.

However, ''in an increasing number of these cases, drivers are being deemed workers, which means the state analysis as to whether they are employees or contractors is leaning in the direction of employees,'' said Veena Dubal, a law professor at the University of California Hastings College of Law, USA Today reported.