A San Francisco driver, Barbara Ann Berwick, filed a federal class-action claim against Uber saying she should be considered an Uber employee, not a contract worker. The California Labor Commission agreed with Berwick because it deemed Uber drivers are "involved in every aspect of the operation."

Uber argues that the class-action part of the suit should be dropped and is appealing the ruling.

But if Uber doesn't get its way, the lawsuit could seriously impact Uber's business model. In a worst-case scenario for Uber, it would have to reclassify all of its California drivers as W-2 employees, as opposed to independent contractors, which would be expensive.

The cost difference between employing W-2 workers and 1099 contractors, which is what Uber's drivers currently are, is a lot. For common-law W-2 employees, employers need to withhold income taxes, Social Security and Medicare taxes, and pay unemployment taxes, according to the IRS. The same is not necessarily true for an independent contractor.