Wednesday March 13, 2019

Uber Settles Driver Classification Lawsuit for $20 Million

Uber has agreed to pay $20 million to settle a lawsuit that stemmed from its classification of its drivers as independent contractors. By classifying its drivers as independent contractors, the ride-hailing service was able to avoid paying expenses and benefits associated with traditional employment. In 2016, Uber had agreed to pay $100 million to settle the case with 385,000 drivers in California and Massachusetts, but another judge threw that ruling out as the payout wasn't sufficient given the original class size. An appeals court ruled in favor of Uber and reduced the amount of affected drivers to 13,600. It determined that "Uber's mandatory arbitration agreements -- which obligate workers to settle their claims with the company one-on-one -- were largely valid and enforceable." The 13,600 drivers who qualified for the settlement either worked for Uber before the mandatory arbitration agreement was added or had opted to not agree to arbitration. Drivers will receive about $.37 per mile driven.

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Uber said it had worked to make "the driver experience even better through improvements like in-app tipping, a redesigned driver app, and new rewards programs," according to an emailed statement from spokesman Matt Kallman. "We'll continue working hard to improve the quality, security and dignity of independent work."