A decision by a state appeals board to classify three Uber drivers as employees of the ride-hailing company, rather than contractors, won't have an immediate impact on the growing “gig economy” industry, but it could in the future.

The state's Unemployment Insurance Appeal Board granted unemployment benefits to three former Uber drivers earlier this month, which could set a precedent for future cases and litigation.

The drivers argued before the board that since Uber provided many of the same services as a conventional employer, it should also pay for unemployment benefits. The board sided with the drivers, saying Uber's model is too similar to a traditional employer-employee relationship to say otherwise.

“Although Uber contends that it is merely a technology platform that connects riders to drivers, its business is similar in many respects to other more traditional car service companies,” the board said. “Here, the technology merely replaces much of the duties of an employee-dispatcher to dispatch a trip request solely to the nearest driver who may accept the dispatched assignment.

“The record, as a whole, demonstrates that the claimants and other similarly situated drivers were covered employees for purposes of unemployment insurance,” the board said.

The decision will force Uber to pay unemployment benefits for the three drivers and any others who bring similar claims before the state—at least for now. The company has until Aug. 13 to either ask the board to reconsider its decision or appeal it to the Appellate Division, Third Department. A spokesperson for Uber said they are still determining how to move forward.

“We disagree with this ruling and we are reviewing our options,” the spokesperson said. “We are confident that the ruling uniquely applies to the three claimants because many of the practices cited in the opinion never applied to one or more of the claimants, are no longer in place, or never existed at all.”

The spokesperson noted three practices that have either stopped or were never used. The company never required drivers to watch an introduction video, they said, and Uber has stopped requiring drivers to take a road map test and maintain a high rating from riders. Ride-hailing users have the option to rate their driver's performance after a ride.

The decision is final if Uber decides not to appeal, according to the state Department of Labor. A spokeswoman for the agency said it will investigate the company if the company chooses not to comply with the board's opinion.

“Uber has the right to appeal this decision,” Jill Aurora, spokeswoman for the Labor Department, told Politico. “If they do not appeal the decision, it will become final and Uber will be required to make UI contributions for these, and other similarly situated drivers. If Uber fails to make such contributions, the department's procedure would be to conduct an investigation to determine the amounts of contributions that are due as a result of this decision.”

A decision from the Appellate Division would not have a wide-ranging impact on all ride-hailing drivers and other individuals that work so-called “gig” jobs. The question before the court would be whether the Insurance Appeal Board had enough evidence for its decision, not whether those drivers should be classified as employees, according to Michael Macomber, a partner at Tully Rinckey in Albany.

“The question is not going to be as far reaching as overturning a broader policy decision. It's going to be these cases,” Macomber said, referring to the three drivers. “Did the board support its decision by a substantial evidence standard?”

It does, however, open the door for other Uber drivers who are similarly situated to submit a claim to the state and expect a similar outcome, Macomber said. It also sets a precedent for future cases, either before the board or in state court.

“Having this decision out there, I think, is problematic for them because while it doesn't create a policy it certainly creates a precedent that other courts, other unemployment decisions are going to look at,” Macomber said.

Workers for companies with a model similar to Uber may also seek unemployment benefits after the decision, said Zubin Soleimany, an attorney for the New York Taxi Workers Alliance. The alliance worked on the case with Nicole Salk, a senior staff attorney at Brooklyn Legal Services.

“Because the business model Uber uses is similar to other companies, there could be a broad impact and while each case is evaluated on its own, the argument here could be persuasive,” Soleimany said.

The decision is the third time a state body has ruled against Uber in the case. The state Department of Labor gave the same opinion in 2016, which was affirmed by an administrative law judge in 2017. The most recent decision was made by Randall Douglas, a member of the Unemployment Insurance Appeal Board earlier this month.