Uber reaches $100m settlement in fight with drivers, who will stay contractors | Technology | The Guardian
by Julia Carrie Wong
Uber has agreed to settle a class-action lawsuit with its California andMassachusetts drivers for up to $100m, avoiding a jury trial that could have reclassified contractors as employees and was expected to determine the fate of the so-called gig economy.
The proposed settlement – which must be approved by a judge – would allow the ride-hail app to continue classifying drivers as independent contractors though it will make some changes to their working conditions.
Under the terms of the settlement, Uber has agreed to stop deactivating drivers “at will” and will allow drivers to solicit tips by placing a sign in their cars. Uberwill also facilitate the formation of a “drivers’ association” that “can play a role similar to a union”, according to a statement from the drivers’ attorney, Shannon Liss-Riordan.
Though the drivers’ associations and settlement money will only apply to drivers in California and Massachusetts, the new deactivation policy will be implemented nationwide, Uber CEO Travis Kalanick said in a blogpost announcing the agreement.
“As Uber has grown – over 450,000 drivers use the app each month here in the US –we haven’t always done a good job working with drivers,” Kalanick wrote. “For example, we don’t have a policy explaining when and how we bar drivers from using the app, or a process to appeal these decisions. At our size that’s not good enough. It’s time to change.”
Of the settlement money, $84m is guaranteed to drivers once the settlement is approved. An additional $16m will be paid out if Uber goes public and its value increases one and a half times from its December 2015 valuation of $62.5bn within a year of its IPO.
The settlement money will be apportioned to drivers based on the number of miles they have driven with an Uber passenger.
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