Employment Law – Uber settles its way out of an uncomfortable situation

We previously reported on the lawsuits against Uber wherein the courts could have ruled on whether its drivers were independent contractors (as Uber contends) or employees.

A settlement agreement has been reached on these lawsuits (in California and Massachusetts) wherein Uber will pay as much as $100 million and agree to a few changes in its operations, including being more flexible about how many cancellations a driver can have in a period of time, agreeing to create drivers association, and allowing drivers to ask for tips.

The settlement is not finalized until it is approved by the courts.  If finalized, the settlement protects Uber’s business model of independent contractor drivers.  This would avoid dealing with all the issues employers, at least in California, deal with such as overtime, breaks, discrimination, harassment, and sick leave.  It also continues to allow drivers a measure of freedom to work when and for how long they want (subject to Uber’s existing driver policies).  The $100 million, if paid, would be distributed to the 385,000 drivers represented in the 2 lawsuits, so drivers should not expect to get rich from this settlement.  Not a bad deal for a company still looking to have an IPO in the future.

For more on this settlement, see these articles from the LA Times and the Verge.



© 2016, LT Pacific Law Group LLP. All rights reserved.

This entry was posted in Employment Law. Bookmark the permalink.