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Uber Will Pay $100 Million To Settle Suits With Drivers Seeking Employee Status (latimes.com)
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.
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." -
So now they are going to expect tips on top of the agreed upon fare? I'm running out of reasons to use them.
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.
--hongpong.com
Uber's long game isn't dealing with drivers ever. They poached a lot of CMU's robotics department. They've pre-ordered self driving Teslas.
The sooner they can get rid of the Drivers the happier they'll be. Right now they're just collecting data for where and where to do the routes. I wouldn't be shocked if they're buying up property for parking garages / charging stations along highly traveled routes.
yes, when a company purposely violates worker rights and safety laws...*gasp*.. they have problems with the law... shocking.
I don't see how this settlement will work. So, current drivers get some cash, but what about new drivers? Can't they sign up now, wait a couple of years or so and then sue?
The real "Libtards" are the Libertarians!
Clown shoes, maybe.
I'd question valuing Uber at 62.5 million.
to their industry. The Taxi cab companies already treat their employees like shit. Uber brought some of that out in the open, but it's not like they're changing anything. What Uber is disrupting is the Job Creator narrative. That a job, any job, is always in a person's best interest. Any fool can see the trap Uber's laying out for their drivers, customers and society at large. They're talking the cost of running a business and putting it off onto someone else. Insurance costs and the cost of paying for damage done will go to the driver and then to society at large when the under paid and under insured driver can't make good. Health Care costs will be born by the tax payer too. Or those costs will fall to the injured passenger. Vehicle maintenance, long term planing, etc all falls on the driver.
See, in America like a lot of places you're told that if you're loyal and hard working the company will take care of you. Uber is disrupting that narrative. There's a chance (however small) that people at large will realize the narrative is bullshit. If that happens we'll see socialism take root in America. Then again Uber might have their self driving cars before all that happens. We'll see.
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The reason I like Uber is that transaction is predictable, "off line" and does not require complicated social ritual of tipping. If Uber drivers begin to expect tips, we are left with a regular taxi service, except that cars are smaller and not standardized. In which case, personally, I'll opt for a taxi again.
I wonder, if Facebook's new "paid users" plan could be considered making them "employees" using this rationale.
A slippery slope indeed...
So Uber could make their drivers franchisers. Franchisers are not allowed to set their own price, they have to kow-tow to corporate policy strictly. Thus Uber can dodge collusion charge. But franchisers have lots of rights too against the corporation, for example when someone buys a Subway franchise they get exclusive rights in an area and prevent corporation from setting up another franchise too close. So Uber drivers, as franchisers, would be able to limit the number of cars that are allowed in a market or in an area. So Uber might not like to give the drivers franchise rights.
I don't see how Uber can deny the drivers both employee rights and franchisers right and have the ability to price gouge during demand spikes.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
That would be tricky.
The problem is that Uber has a lot of control over what it's drivers do because it deactivates (ie: fires) them for shit like refusing a fare or pissing management off. That makes it very tricky for them to get the IRS tests for employee or contractor to say contractor, which means that they are on the hook for a variety of things including the employer half of their driver's self-employment taxes. Since all 50 states have their own employee/contractor rules, with their own employee/contractor tests, and their own legal ramifications if you classify somebody wrongly it gets very complicated very quickly.
Under the settlement they pay current drivers off, and agree to a number of concessions that give Uber management significantly less control over how an individual Uber driver works. In particular they can't basically force a driver to accept a ride by including algorithms that fire him if he refuses to take a certain number of rides, they can't fire them for no reason, there's a whole Appeals Process, etc. There's also a lot more transparency regarding discipline, which is good because one of their problems was that when you asked them "are you doing thing x to your drivers that would insta-convert them to employees and fuck your business model?" Uber would have reams of paperwork saying "Hell no," and then you'd ask the drivers and they'd say "Hell yes." And if your contractors act like employees because they think you'll fire them if they don;t act like employees they are employees.