Uber’s worst nightmare has come true:

In what could be an explosive decision, the California Labor Commission has found that a driver for Uber in San Francisco is an employee of the company. That’s from a ruling filed in state court on Tuesday and first reported by Reuters. It’s pretty damning. “Defendants hold themselves out as nothing more than a neutral technological platform, designed simply to enable drivers and passengers to transact the business of transportation,” the commission writes. “The reality, however, is that Defendants are involved in every aspect of the operation.” [Slate]

So far, the ruling only applies to one driver from San Francisco, but the precedent could be far-reaching. Uber plans to appeal.