UPDATE 1-Uber drivers are contractors, not employees, U.S. labor agency says

A U.S. labor agency has concluded that ride-hailing company Uber Technologies Inc's drivers were independent contractors and not its employees, which could prevent them from joining unions. The National Labor Relations Board's general counsel in a memo released on Tuesday said Uber drivers set their hours, own their cars, and are free to work for the company's competitors, so they cannot be considered employees under federal labor law.

Uber in a statement said it is "focused on improving the quality and security of independent work, while preserving the flexibility drivers and couriers tell us they value." Uber shares were up 6.4 percent at $39.46 in late trading on the New York Stock Exchange.

The memo dated April 16 came in an NLRB case against Uber that has yet to reach the five-member board, which is independent of the general counsel. Under the National Labor Relations Act, independent contractors cannot join unions and do not have the right to engage in organizing activities. (Reporting by Daniel Wiessner in New York and Akanksha Rana in Bengaluru; Editing by Shinjini Ganguli)

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