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Uber Will Pay $100 Million To Settle Suits With Drivers Seeking Employee Status (latimes.com)

Posted by BeauHD on from the settled-but-undecided dept.

An anonymous reader writes: Two lawsuits posing a threat to Uber's on-demand business model have been settled. Uber has agreed to pay up to $100 million to drivers who sought to be classified as employees of the company. The initial sum paid will be $84 million, which will settle cases in California and Massachusetts to some 385,000 drivers. If the company goes public or gets purchased, Uber said it will pay drivers an additional $16 million. The company is currently valued at $62.5 billion. In addition, new policy changes will force the company to no longer be able to deactivate drivers' accounts at will. They will also stop deactivating drivers who turn down rides frequently. Appeal panels will be created to help drivers form an association so they can contest terminations. The last policy change requires Uber to clearly inform riders that tips are not included in Uber's fares. Drivers will now be able to solicit tips from passengers. "If we chose not to settle this case, we faced risks," plaintiff attorney Liss-Riordan said in a prepared statement. "We faced the risk that a jury in San Francisco (where Uber is everywhere and quite popular) may not side with the drivers over Uber." The settlement still needs to be approved by Judge Edward Chen of the District Court of Northern California, which will probably be a months-long process. The company seems to be waist-deep in legal trouble lately. Two weeks ago, Uber agreed to a settlement of $10 million for misleading advertising about the quality of its background checks for drivers. One week prior, it was reported the CEO of Uber will go to court over price fixing claims in New York.

6 of 83 comments (clear)

  1. Disruptive Industry by TheReaperD · · Score: 3, Insightful

    Anytime you have an organization that is truly disruptive to industry, you'll end up with problems like this. Uber and all similar companies that are disrupting their respective industries are having to fight an uphill battle with established industries, regulators and a whole host of organizations that have a vested interest in the way things currently work, such as insurance providers and licensing agencies. It's going to be messy with laws and organization eventually adapting until they become part of the establishment; usually with a compromise between the business models of the establishment and the disruptive group.

    --
    "Be particularly skeptical when presented with evidence confirming what you already believe." -
    1. Re:Disruptive Industry by tlhIngan · · Score: 5, Insightful

      Anytime you have an organization that is truly disruptive to industry, you'll end up with problems like this. Uber and all similar companies that are disrupting their respective industries are having to fight an uphill battle with established industries, regulators and a whole host of organizations that have a vested interest in the way things currently work, such as insurance providers and licensing agencies. It's going to be messy with laws and organization eventually adapting until they become part of the establishment; usually with a compromise between the business models of the establishment and the disruptive group.

      No, it's not disruptive. It's just cheating. The taxi industry went through the same things Uber is going through, except it was over decades ago It's why those regulations exist - because in the past, taxi companies cheated the heck out of people.

      The "sharing economy" is really more of a wage slave economy. The only thing they figured out how to do was to get people to ignore all the improvements to working conditions that were achieved and put into law and claim it as a new and innovative.

      You disrupt industry by doing things in new and innovative ways, not by finding loopholes in law that let you bypass existing regulations.

      Even things like banning drivers who turn down too many rides? That's not an independent contractor - an independent contractor has the right to determine which rides they will take without repercussion (other than not making money off it). Hell, all Uber had to do was send an alert to nearby drivers and ask them to "bid" on the job and give it to the lowest bidder - just like how contractors bid on projects, Uber would be revolutionary by having drivers bid on taking rides. If the person wanting the ride had the option of picking the ride they wanted (not necessarily the lowest, but include stuff like the car and driver's ratings) then Uber would've been a marketplace for selling rides. That would be innovative.

    2. Re:Disruptive Industry by Anonymous Coward · · Score: 2, Insightful

      Bullshit. This is not about the "business models" of the establishment. This is about safety and worker rights issues. I'm tired of Uber posting this red herring.

      What? Do you think the business models of taxi companies were somehow different from Uber? no, they tried to pull the same shit. Uber and the taxi companies are exactly the same.

  2. Uber skips 1099 rules & W2 insurance requireme by HongPong · · Score: 5, Insightful

    Yes US labor law is out of date. It is demented for health insurance to be linked to jobs. Only W2 jobs cover this. 1099 employers are not supposed to be able to dictate how people do their jobs (including if they pick up fares or not). Taxicab companies have to cover all the expenses of W2 while Uber ducks this by trying to stick them as 1099s. Uber is "transportation slavery" as a driver put it to me, who much prefers working with less exploitative ride services. They have "socialized risk" while privatizing profit. All the Uber drivers in a region should be able to strike, if they are a bargaining unit in some polygon that will be the only way they can get leverage. Working at the precariat level of the economy is a horrible experience and it can't continue. So many tech companies blow out existing players by undercutting as loss leaders, then turn it into a monopoly, then hike the prices. Walmart and Amazon have done the same thing. It is sick that no one in this realm is capable of working on healthy commercial ecosystems, it's either precariat oppression monopolies or bust.

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    --hongpong.com
  3. Re:Not all inclusive anymore by twotacocombo · · Score: 3, Insightful

    Tips are, and have always been, optional. Nobody says you have to tip anybody. That being said, the first time I ever used Uber, nowhere did it say you couldn't tip through the app, and I assumed there would be a place to do so after the ride. Apparently not. Had I known, I would have given the driver a cash tip because he was great. I'm glad they've agreed to make this more clear. It only cost the driver a couple bucks that trip, but a couple bucks here and there starts to add up.

  4. nice dreaming their uber representative by Anonymous Coward · · Score: 5, Insightful

    yes, when a company purposely violates worker rights and safety laws...*gasp*.. they have problems with the law... shocking.