Welp, that big class-action lawsuit we've been talking about for over a year has been settled, along with a similar suit in Massachusetts, that we and a number of legal experts thought was going to be Uber's undoing or, at least, its comeuppance. As you may recall, several labor lawyers were suing both Uber and Lyft on behalf of their "driver-partners" saying that because of the way the company was structured, all drivers legally should be considered employees and not independent contractors. Somewhere upwards of 160,000 current and former drivers in California were eligible to join the suit, according a judge's ruling in December, and it had the potential to cost the company upwards of $209 million. Now Uber has agreed to settle for $100 million, and as Wired notes, this settlement "doesn't really settle much of anything" when it comes to the drivers' rights, or whether Uber's business model is even legal.
A series of other decisions, including one last June that declared Yellow Cab drivers had to be treated as employees, spelled some potential financial heartache for Uber and Lyft as a number of judges appeared sympathetic with the idea that yes, these are not technology companies so much as they are transportation companies, and they're not treating the workers at the core of their business fairly under the law.
One key element which is addressed in the settlement is the idea that drivers receive ratings and their employment, and use of the Uber app, depends on these ratings. Uber now says it will, in addition to the individual payments to drivers to cover past expenses, "provide drivers with more information about their individual rating and how it compares with their peers." They say they'll also be more transparent about how and why drivers get deactivated.
In a statement Thursday, Uber CEO Travis Kalanick makes the case that because drivers can choose to work for both Uber and Lyft simultaneously and make their own hours, they ought to and should remain contractors. "Today, while the number of drivers using our app has grown dramatically, their reasons for doing so haven’t changed," Kalanick says. "In the U.S. almost 90 percent say they choose Uber because they want to be their own boss."
The plaintiffs' attorney, Shannon Liss-Riordan, tells the Examiner that she considers the settlement a victory, even if it doesn't answer the legal question at the center of the case. She acknowledges to the paper that trying the employee-vs.-contractor question in San Francisco would have been risky given that Uber is "everywhere and quite popular" here. "The debate won't end here," she assures us, so, this means such a case may still crop up elsewhere in the country in the coming months.
This is just the second big legal bill Uber is wiping off its books this month, the first being the $10 million settlement announced two weeks ago in which the company is paying off the cities of San Francisco and Los Angeles to stop hassling them about their safety promises settling a 2014 suit brought by the city attorneys in both cities that, in part, accused both Uber and Lyft of making misleading statements to consumers with regard to driver safety, among a few other things. As a result, Uber changed it's "safe-ride fee" to a "booking fee," and it is now "bound by a permanent injunction prohibiting the company from making misleading statements regarding the safety of its transportation services or the background checks of its drivers." Uber also agreed in February to settle a class-action suit about the "safe-ride fee" and pay out $28.5 million to 25 million passengers.
Nevertheless, the company's legal woes are likely far from over. In addition to everything else, there's a case in New York State in which a judge is poking holes in the surge-pricing model, and has made comparisons between the company and The Silk Road.
