Uber Settles Independent Contractor Lawsuit

A long-running legal battle between Uber Technologies Inc. and some of its drivers has been settled. Under the terms of the settlement, Uber has agreed to pay the drivers $20 million. The settlement covers drivers in California and Massachusetts who drove for Uber from August 2009 through February of this year. It still must be approved by a federal judge.  

The settlement agreement says that Uber agrees to change the way it removes drivers from the service to make the process more transparent. The company will also institute an appeals mechanism for those who have been removed. Uber has also agreed to provide drivers with classes to teach them how to improve ride quality.

The settlement reportedly does not include a clause to reclassify the company’s independent contractors as employees. As independent contractors, drivers do not get health care or other benefits from Uber. The company saves a lot of money avoiding these costs.

The drivers wanted the ride-hailing company to recognize them as employees Uber has said that the flexible schedules and other perks drivers have due their classification should be an acceptable trade-off. The company has also launched several new programs and technology improvements to help drivers. In a statement, an Uber spokesman said that the company has pledged to “continue working hard to improve the quality, security and dignity of independent work.”

The spokesman said in the statement that the company had “changed a lot” since the lawsuit was originally filed in 2013. Uber actually settled the suit in 2016, offering the drivers $84 million with an additional payment of up to $16 million due after its I.P.O., but that deal was thrown out by a federal judge as being unfair to the drivers. The new settlement offer is roughly one-fifth of that amount.

According to the court filing, drivers will individually walk away with more money under the proposed settlement offer than they would have under the 2016 settlement offer. Roughly 385,000 drivers were covered by the original class-action lawsuit compared to about 13,600 drivers between the two states.

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