The ride-hailing company has agreed to pay $20 million to settle a lawsuit first instigated by drivers nearly six years ago. According to drivers for the company, they are employees of the company and not contractors as UBER sees them, and therefore they should be entitled to expenses and wage protections. UBER’s proposed settlement sees drivers receive a payout for expenses, but will not change their status as independent contractors.
The settlement amount is considerably lower than the $100 Million offer UBER proposed in 2016 which was ruled as being inadequate by US District Judge Edward Chen. However, the original lawsuit involved some 385,000 drivers across California and Massachusetts. Following Judge Chen’s rejection of the deal, UBER won an appeals court ruling that forced many drivers into arbitration, and in a bid to settle these dispute more quickly, the company offered some a settlement of 11 cents for each mile they had driven, which could add up to a payout of several thousand for individual drivers. Uber’s most recent settlement proposal now covers just 13,600 drivers between the two states, so they’ll get more money than they would have under the $100 million settlement offer.
According to Shannon Liss-Riorden, an attorney for the drivers, the settlement is “substantial” and should work out to be about 37 cents a mile for those drivers involved in the lawsuit. This is an improvement on the $12 dollar total some of the drivers would have received under the previous settlement offer but as Reuters notes, till not as much as the reimbursements seen in earlier claims. According to documents shared with Reuters, one driver was reimbursed 64 cents per mile in early 2018.
This is good news for UBER as it continues to try and clean up a long list of lawsuits, complaints, and investigations all before it goes public later this year. UBER confidentially filed for an initial public offering in December and could be valued at as much as $120 billion. In a bid to appease its drivers, UBER will allegedly give them the opportunity to buy shares at its IPO. However, the settlement still needs to be approved by Chen, so UBER might not be done with this yet.
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