Uber Agreed To Pay $20 Million To Drivers in CA Lawsuit

Uber Agreed To Pay $20 Million To Drivers in CA Lawsuit

The judge found that there was an “overwhelming likelihood” that these companies have been misclassifying their drivers as contractors.

Drivers have been fighting the misclassifcation battle since the last few years and these problems came to light once again as the Uber IPO started approaching. During the months leading up to May 2019, the gig economy was under critical scrutiny for the classification of Drivers as independent contractors and Uber saw this as the perfect time to officially settle this almost six-year-long case regarding this exact topic.

Uber agreed to pay $20 million to settle the class-action lawsuit that was filed in 2013 by Douglas O’Connor and Thomas Colopy. This is also in striking contrast to the time in 2016 when a judge refused Uber's offer to to settle for five times this amount of $100 million.

The suit was filed in 2013 and claimed under a set of evidence and examples how Uber treats its drivers more like employees but still classifies them as indepdent from the company to avoid paying them a minimum wage and providing benefits which are only available to employees of the company. The suit became a class-action soon and represented thousands of Drivers in California and Massachusets who feel the same about the company's treatment. The total number is close to 13,000 from both states.

Which Drivers are eligible for this?

Drivers for Uber between 2009 and 2019 in California or Massachusetts who are not bound by Uber's arbitration clause are eligible. The days of the year exactly can be found in this article.

Drivers were also able to get Uber to agree to a more comprehensive deactivation policy so that regular Drivers with no other forms of income can not be instantly removed from the network upon the company's free will. “Uber has changed a lot since 2013. We have made the driver experience even better through improvements like in-app tipping, a redesigned driver app and new rewards programs like Uber Pro,” an Uber spokesperson told TechCrunch. “We’re pleased to reach a settlement on this matter and we’ll continue working hard to improve the quality, security and dignity of independent work.” With the size and expanse of Uber's driving service economy across the U.S, drivers have become increasingly used to finding the app to find riders in the city. Along with Lyft, the two companies control over 95% of the U.S market meaning there is no alternative if the company suddenly chooses to deactive the Driver. This comprehensive new policy aims to make that part of a Driver's life more certain and just.

The lawyer for the plaintiffs, Shannon Liss-Riordan realizes that the 13,000 drivers are a very small percentage of the 1M+ drivers in the US and even though she is happy that this settlement has been reached, there is a long way to go.

“As a result, while we were able to pick up the pieces and achieve this substantial settlement for the drivers not covered by arbitration clauses, other drivers would need to pursue their claims in individual arbitration if they wanted to attempt to recover anything on their claims,” she said in a statement to TechCrunch.

The case is O’Connor v. Uber, 13-cv-03826 in the U.S. District Court for the Northern District of California (San Francisco).

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