A ruling by the local Commission for Conciliation, Mediation and Arbitration (CCMA) court in SA this week could have serious ramifications for how e-hailing taxi service Uber works.
The CCMA found there was an employment relationship between seven 'deactivated' driver-partners and Uber South Africa.
Uber has always maintained it does not employ any drivers or own any cars. Instead, it provides the technology platform that enables the connection between driver and passenger.
An Uber spokesperson says this ruling will only apply to the seven individual drivers and not all of the 2 500+ driver-partners across the country.
"There is a long legal challenge ahead before this ruling can be considered a win or a loss for any side on this important issue.
"The one thing that is clear is that this provides an important opportunity for all sides to carefully examine the role of independent contractors in an increasingly digital age, and specifically where small, midsize and large business owners rely on technology-enabled services to grow their independently operated companies."
Courts around the world have made similar rulings. In 2015, the California Labour Commission ruled an Uber driver was indeed an employee and not an independent contractor. Late last year, a London court also said the drivers should be reclassified.
However, in February this year, a court in Florida ruled Uber drivers are independent contractors and not employees, which means they are not entitled to unemployment compensation benefits when their working relationship with the car ride service terminates.
Uber South Africa says it will take the local CCMA ruling to the Labour Court of SA to be reviewed.