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Uber Settles Two Class Action Lawsuits


Recently, it was announced that Uber had agreed to pay nearly $100 million to drivers to settle two class action lawsuits filed against the company.  Those suits involved disputes over whether Uber drivers were improperly characterized as independent contractors rather than employees.  The class actions argued the drivers were entitled to reimbursements for overtime, fuel, maintenance expenses, and tip money that they alleged had been withheld by the company.  I thought this would be a good time to highlight these cases so readers have an idea of the magnitude of this settlement.



Uber's Statement on the Settlement of the Two Class Action Lawsuits

Direct from Uber's Newsroom, there is a press release which breaks down the agreed upon settlement with specifics on what Uber will pay (and provide to its drivers) to settle the case.  For those looking for a quick reference on what is being settled, this is a good place to start.


Uber Settles Suits & Prevails...At Least For This Round

Erik Sherman has a good overview of how the settlement of the two suits against Uber will likely amount to a "win" for the company...for the time being.  The settlement, which still has to be approved by the court, is for a potential $100 million ($84 million now with an additional $16 million if Uber goes public and its valuation grows an additional 50% in the first year).  Given that the number of drivers impacted by these suits is around 385,000 (and it would amount to an average payout of $145/driver), Uber is able to avoid a potentially much larger payout had this case been tried in court.  

With this settlement, Uber has managed to push the dispute over its identification of its drivers as independent contractors rather than employees down the road...for now.  As Sherman writes, this is the biggest win for Uber with this settlement.  But I certainly do not think this is the last we have heard of the independent contractor vs. employee dispute when it comes to ride sharing workers.

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