Uber Settles Lawsuit with Drivers for $20 Million
On Monday, Uber settled a lawsuit with its drivers in California and Massachusetts who wanted the company to recognize them as employees. While Uber agreed to pay the drivers $20 million, it did not agree to change their status as independent contractors. The lawsuit was filed in 2013 and settled in 2016 for $84 million from Uber with an additional payment of up to $16 million due after the company’s IPO; however, the agreement was discarded by federal judge Edward Chen who thought it unfair to drivers.
As independent contractors rather than employees, Uber’s drivers do not get benefits like health care, overtime, and sick leave, but Uber has said that the drivers receive other advantages, such as flexible schedules. While the settlement still requires a judge’s approval, Uber spokesman Matt Kallman said that the company has worked to make “the driver experience even better through improvements like in-app tipping, a redesigned driver app, and new reward programs like Uber Pro” and that it will “continue working hard to improve the quality, security and dignity of independent work.” Uber has also agreed to make its process of removing drivers from the service more transparent by better explaining its deactivation policies, creating a deactivation appeals process, and helping drivers who were deactivated get back on the platform.
According to the filing, the settlement covers California and Massachusetts drivers who drove for Uber from August 2009 through February 2019. While the original lawsuit covered around 385,000 drivers between the two states, the update only covers about 13,600. The court filing says that drivers will individually receive more money under the newly proposed statement than they would have under the 2016 offer; under the original offer, some drivers would have made only $12.
An attorney for the drivers, Shannon Liss-Riordan, has said that the settlement was “substantial” and that they believe “these drivers will receive approximately 37 cents per mile for the miles they have driven for Uber.” She has also said that “this is not the end of the issue of driver classification” and that they are “continuing to pursue many cases against gig economy companies that are misclassifying their workers” in order to save costs and shift risks and expenses to their employees, citing pending cases against Amazon, Lyft, and Postmates.