[Nfbc-info] Uber abandons trial, settles massive driver court case
buhrow at nfbcal.org
Sat Apr 23 03:16:47 UTC 2016
hello. I found the following article in my local paper and thought it
worth posting here. The most interesting thing to note from the customer
perspective, as far as I can tell, is that drivers will now be expecting
cash tips in addition to what you pay with your credit card. Of course,
they say tips aren't required, but I'm guessing they'll be highly expected,
much as tips at restaurants aren't technically required either.
From my perspective, Uber is becoming ever more like a cab every day.
In fact, I was talking with a cab driver earlier this week and he told me
he drives for the cab company, Uber and Lyft. He says it's the only way he
can make driving folks around worth the effort. I'll note that this
article also acknowledges that some drivers work for both Lyft and Uber.
Uber abandons trial, settles massive driver court case
By Marisa Kendall, Bay Area News Group
Posted: 04/22/16, 4:47 PM PDT | Updated: 2 hrs ago
SAN FRANCISCO >> Dodging a legal threat to its future, Uber has agreed
to pay up to $100 million to a group of its drivers to avoid having to
treat them as regular employees.
Under terms of the deal announced Thursday evening, Uber would not have
to reclassify its independent contractor drivers or offer them employee
benefits such as minimum wage, overtime and reimbursement for driving
The case, scheduled for trial in June, has captivated the Bay Area
because a ruling against Uber -- the world's most valuable startup --
had the potential to upend the exploding on-demand industry. Many other
companies in the space follow Uber's independent contractor business
model, which saves them money and -- they insist -- offers their
Boston-based attorney Shannon Liss-Riordan, who represents the 385,000
drivers in the dispute, said the settlement allows drivers to avoid the
risk that a jury in San Francisco -- a city where Uber use is
widespread -- would side with the ride-booking company. The settlement
covers drivers in both California and Massachusetts, where
Liss-Riordan's practice is based.
"We realize that some will be disappointed not to see this case go to
trial in June," Liss-Riordan wrote in an email. "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
If a federal judge approves the settlement, Uber will pay $84 million
right away. The remaining $16 million is contingent on Uber's growth.
If Uber's valuation grows by one and a half times in the first year
after it goes public, the company will have to fork over the extra
cash. Uber, valued at more than $60 billion, has not announced any
plans for an IPO.
The money will be allotted to drivers based on how many miles they have
driven for Uber, with drivers with more than 25,000 miles possibly
receiving an average of $8,000, according to Liss-Riordan.
In a blog post Thursday evening, Uber CEO and co-founder Travis
Kalanick reiterated the importance of classifying Uber drivers as
"Drivers value their independence -- the freedom to push a button
rather than punch a clock, to use Uber and Lyft simultaneously, to
drive most of the week or for just a few hours," he wrote. "That's why
we are so pleased that this settlement recognizes that drivers should
remain as independent contractors, not employees."
The settlement may make it easier for drivers to earn tips, which was a
main issue in the original lawsuit. Drivers claimed Uber told
passengers that tips were included in the fare, but the company did not
actually give tips to the drivers. As part of the agreement, Uber will
let drivers post signs in their cars stating, "Tips are not included,
they are not required, but they would be appreciated."
Uber also would no longer be able to kick drivers off the platform at
will. Instead, drivers would be removed only for sufficient cause (not
including accepting a low number of rides) and would most often receive
warnings and the opportunity to correct problems. Drivers wishing to
fight their removal could bring their concerns to an appeals panel made
up of other Uber drivers.
And Uber drivers would be able to form a quasi union, dubbed a "driver
association," which will bring any grievances to management.
In January, Lyft agreed to pay $12.25 million to settle similar claims,
but the court rejected the settlement as too low earlier this month.
Liss-Riordan called the Uber deal one of the largest ever achieved on
behalf of workers claiming misclassification as independent
contractors, and wrote it stands as a warning for other companies who
improperly deny their workers employee benefits.
"As a result of this litigation, many companies have chosen to go the
other way and not fight this battle," she wrote, "and instead to
classify their workers as employees with all the protections that
accompany that classification."
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