Uber settles suit for up to $100 million; drivers stay contractors
Uber drivers will remain independent contractors and receive up to $100 million under a settlement announced late Thursday of class-action lawsuits pending in California and Massachusetts.
The drivers had sought to be reclassified as employees — something that Uber said would devastate its business model and hurt drivers’ flexibility to set their own schedules.
Uber is the most public face of the burgeoning new “gig economy” in which online marketplaces connect workers with customers for services such as rides, cleaning or errands.
The rise of the sector has triggered a national discussion about whether gig workers should be entitled to the rights and benefits of employees.
By putting the case behind it, Uber is free to concentrate on its global expansion and preparations for a public stock offering.
[...] a Wall Street debut was part of the settlement deal.
Drivers had complained that deactivations sometimes seemed arbitrary and were linked to how many rides they accepted — a factor that should have been under their control if they were truly independent contractors.
“We believe the settlement ... provides significant benefits — both monetary and non-monetary — that will improve the work lives of the drivers and justifies this compromise result,” said Shannon Liss-Riordan, the attorney for the drivers, in a statement.
A jury trial with an eventual appeal to the U.S. Supreme Court likely was a risk that she chose not to take, she said.