Judge holds up Uber settlement with drivers

U.S. District Judge Edward Chen of San Francisco did not definitively reject the agreement, negotiated by a lawyer for plaintiffs in a class-action suit against the ride-hailing company, and said he might ultimately find it to be fair and reasonable based on further information or changes in some of its terms.

[...] he said the parties to the settlement had failed to address arguments by objectors — groups of dissident drivers and their lawyers — who said they were being short-changed.

Chen said one claim — that Uber had violated California labor laws by classifying drivers as independent contractors rather than employees, denying them overtime, work expenses and other benefits — could be worth $1 billion or more if the drivers went to trial and won employee status.

“The parties should provide more substantial legal authority for why a 99.9 percent discount (in the labor penalties) is warranted,” Chen said.

Mark Geragos, a lawyer for a group of drivers challenging the settlement, praised the decision and said Chen rightly “wants to know why (the plaintiffs) think they can hijack claims” in his suit and others.

The company would also agree to provide funding for a “driver association” that would discuss drivers’ concerns with managers but would not have the powers of a labor union.