Of all the legal troubles that pestered Uber recently, the one that would fundamentally threaten its business model is not the licensing fight with an occasional rebel city. Rather, It is the employment status of its drivers. Are they independent contractors each owning his or her single car business, as Uber likes to claim, or are they Uber’s employees, entitled to benefits, overtime pay, and collective bargaining? The answer to this challenge could dramatically reshape the sharing economy.

Uber uses legal language in its contract with drivers to define them as “partners,” not employees. It says it is providing drivers with “business opportunities,” and it refers to itself as a “technology company” or a “platform”—not a transportation company.

But in several lawsuits, drivers are arguing that despite this guarded Uber-speak, Uber in fact behaves like an employer. Drivers are therefore entitled to benefits that the law guarantees to employees, which Uber currently does not provide. The law defines an employer as one who has “the power or right to control and direct the employee in the material details of how the work is to be performed.” Various courts have now weighed in on the question: does Uber “control and direct” its drivers?

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