According to a ruling by the California Labor Commission, Uber drivers are employees, not contract workers. The distinction could have serious consequences for San Francisco's booming share economy. 

Uber has always argued that its drivers are independent contractors, not employees, and that the ride-sharing platform is "nothing more than a neutral technology platform." The company argued in court that it did not exert any control over the hours its drivers worked and did not require drivers to complete a minimum number of trips, according to the court filing.

However, the new ruling—filed on Tuesday in state court in San Francisco—says Uber is "involved in every aspect of the operation," citing that Uber provided drivers with phones and had a policy of deactivating its app if drivers were inactive for 180 days.

The commission was reacting to a labor commissioner's award of about $4,000 in expenses to local driver Barbara Ann Berwick, who filed her claim in September, and which Uber subsequently appealed. Berwick worked as an Uber driver for just over two months last year.

If Uber drivers are indeed to be considered employees, that opens Uber up to higher costs, including Social Security, workers' compensation, and unemployment insurance...all of which could have a serious effect on the company's $40 billion valuation. But maybe it's time Uber took some accountability for its drivers. What do you all think? Join the conversation on Facebook!