Sep 5, 2025
The ride-hailing platform Uber, which has been operating in Costa Rica for a decade, is embedded in a digital labor model that has generated widespread debate about the rights of its "collaborating partners." In this context, national courts have begun to analyze in depth whether drivers operate under autonomy or real subordination. Today, the decision of the Labor Court of Appeals of the First Judicial Circuit of San José (Costa Rica) was announced—vote 2025-001146, issued on August 27, 2025—which fully confirms a previous ruling from April 2024. That lower court (Labor Court, Judge Rebeca Ruiz) had declared the existence of a disguised employment relationship under a "facade of collaboration" between Uber and a driver.
The Court of Appeal upheld this conclusion, holding that the transportation company acted as a de facto employer: it imposed orders, imposed sanctions (for example, the sudden termination of employment of the driver), and paid wages. Consequently, Uber must pay the plaintiff all employment benefits (vacation, Christmas bonus, severance pay, and damages) in the amount of approximately ¢10 million. It must also retroactively register the worker with the Costa Rican Social Security Fund for the years he had not contributed.
The Labor Court of Appeals of the First Judicial Circuit of San José confirmed the employment nature of the relationship between Uber and a Costa Rican driver. The ruling emphasizes that, beyond the commercial form of the contracts, the proven facts demonstrate dependency. The ruling analyzes the "classic signs" of an employment relationship (personal provision of services, compensation, and subordination) and adds new criteria specific to the digital age: it expressly mentions "algorithmic subordination," "brand alienation" (the driver operates with Uber's image and controls), "false autonomy," and the "unilateral deactivation" of the account (a virtual dismissal). Furthermore, it applies the principle of the primacy of reality—enshrined in Article 18 of the Labor Code—which prioritizes the practical situation over any formal contract. In summary, the Court concludes that Uber disguised an employment relationship with its commercial contracts, violating labor law protections and ordering its employer obligations, such as contributions to the CCSS.
The court ruling has significant consequences. As the lawyers in the case have pointed out, it sets a precedent in Costa Rica: any other driver in similar circumstances could now claim recognition of an employer-employee relationship. If materialized, this would mean that thousands of platform workers—not only from Uber, but also from delivery services and other apps—would be considered formal employees, with minimum wage, regulated hours, and employer-sponsored social security contributions. In tax practice, their income would become wages subject to withholdings and contributions to the CCSS (Council of Social Security) by the company. It should be noted that the bills under discussion so far in the Legislative Assembly do not contemplate this approach; on the contrary, they continue the "legal cover-up" by placing the tax burden primarily on the drivers. The August 27 ruling contradicts this line: it imposes real obligations on platform employers and reinforces the requirement for social protection in the digital economy. Consequently, this judicial ruling could accelerate regulatory adjustments in Costa Rica and will have a direct impact on local businesses and authorities, forcing them to fully address the labor and tax challenges associated with the business model of Uber and similar platforms.
This ruling contradicts the Treasury's position that they are considered independent workers. Historically, the Treasury has considered that the income of Uber, DiDi, and similar drivers comes from independent profit-making activities. For example, in 2016, it was established that Uber drivers must register with the General Directorate of Taxation "as independent workers" and pay taxes on the profits obtained from their services. This same logic was reflected in May 2023, when a presidential bill stipulated that these drivers would pay their taxes "as independent workers." Furthermore, the Ministry of Finance has implemented an information-sharing mechanism with digital platforms (such as Uber Eats, DiDi Food, Airbnb, etc.) to identify these "sellers" and audit their taxable income.
References used: La Nación – “Court of Appeal confirms: Uber had an employment relationship with a driver” (August 2025).
University Weekly – Judge Rebeca Ruiz's analysis of “algorithmic subordination,” “brand alienation,” and “primacy of reality.”
Diario Extra / Delfino.cr – Lawyers' opinions on the precedent this could set for other drivers.