Taxi organisation Uber has agreed to a settlement for class-action lawsuits disputing the status of Uber drivers as independent contractors.
The settlement relates to lawsuits in California, O’Connor et al. vs Uber Technologies, and Massachusetts, Yucesoy vs Uber Technologies.
Under the terms of the agreement, Uber would continue to classify drivers as independent contractors rather than employees.
The settlement will see Uber pay $84m (£58m) to the plaintiffs, and a further $16m (£11m) if the organisation goes public and its valuation increases by one-and-a-half times its December 2015 financing valuation.
The organisation has also agreed to provide drivers with more information about their rating and how it compares to their peers, and has published a deactivation policy for US drivers, explaining the reasoning and process behind deactivating drivers from the Uber app.
In addition, a drivers’ association will be established in both California and Massachusetts, which will meet with the organisation on a quarterly basis to discuss any issues that may arise.
Uber has also agreed to make it clear to users of the service that tips are not included in its fares.
The settlements are pending approval from US District Judge Edward Chen.
Travis Kalanick, co-founder and chief executive officer at Uber, said: “Uber is a new way of working: it’s about people having the freedom to start and stop work when they want, at the push of a button. As we’ve grown we’ve gotten a lot right, but certainly not everything.
“This new deactivation policy is an important step forward when it comes to working with drivers. But there’s more to do, which is why I’m excited about some other improvements we have planned for the not-too-distant future.”
Shannon Liss-Riordan, one of the legal representatives for the drivers, added: “We realise that some will be disappointed not to see this case go to trial in June. We were looking forward to this trial. But we believe the settlement we have been able to negotiate for Uber drivers throughout California and Massachusetts provides significant benefits, both monetary and non-monetary, that will improve the work lives of the drivers and justifies this compromise result, which will not result in the drivers being reclassified.
“Importantly, the case is being settled, not decided. No court has decided here whether Uber drivers are employees or independent contractors and that debate will not end here. This case, however, with this significant payment of money, and attention that has been drawn to this issue, stands as a stern warning to [organisations] which play fast and loose with classifying their workforce as independent contractors, who do not receive the benefits of the wage laws and other employee protections.”
