content: Not just that, Uber will become liable for the drivers' actions.  I know there have been a couple of crimes that involved Uber drivers (I specifically remember a rape, and someone being run over and killed).  If they are considered W-2 employees, Uber could be sued for that in the same way you could sue FedEx if one of their drivers ran you over. Driver doesn't have commercial insurance?  That is now Uber's problem, not the driver's.  And police will ticket them, I can guarantee it. In all likelihood, Uber would probably just pull out of California.  It becomes less desirable for everyone.  Drivers are now W-2, so Uber  gets to tell you when to drive and when not to drive.  Uber has massively increased personnel costs.  Since you're already W-2, Uber may switch to paying hourly rather than letting you choose when to drive and letting you keep a portion of what you make.  Alternately, Uber may simply pull back and stop providing materials for employees, letting them maintain contractor status.