Uber has agreed to a $20 million settlement for a class-action lawsuit that has lasted years.
The lawsuit was opened years ago over Uber’s policy of recognizing its drivers as “independent contractors.”
The results of the recent settlement can be counted as a win for the organizers, but it did not achieve one key goal. While the settlement has produced $20 million, Uber drivers will still be regarded as independent contractors. The lawsuit, which was instigated by Uber drivers six years ago, argued that drivers are Uber employees, not contractors. The difference is critical, as employees would be entitled to wage protections and certain work-related expenses. The settlement will see many drivers receive a payout for these work-related expenses, but the ride-sharing company didn’t agree to change its drivers’ status.
The settlement fell far short of the $100 million Uber offered in 2016, which District Judge Edward Chen ruled to be too little. That offer involved 385,000 drivers in California and Massachusetts, but Uber went on to win an appeals court ruling that threw many drivers into arbitration. In an effort to handle the fallout quickly, Uber offered many drivers $0.11 for every mile they’ve driven, netting some drivers thousands of dollars. The recent lawsuit only covered 13,600 drivers in two states, so those lucky drivers will get more than they would have with the original $100 million.