Article: Uber to pay $20 Mn to resolve ‘Driver Classification Suit’

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Uber to pay $20 Mn to resolve ‘Driver Classification Suit’

Uber drivers filed a lawsuit against the company for not paying for traditional benefits like paid sick time and workers’ compensation.
Uber to pay $20 Mn to resolve ‘Driver Classification Suit’

Uber has announced that it has finally settled the long-standing dispute with drivers by paying $20 Mn. About 13,600 drivers have w participated in the settlement.

The drivers of  Uber Technologies Inc. filed a lawsuit filed by Uber drivers challenging the company’s classification of drivers as independent contractors, and not employees owed the benefits of traditional employment.

The drivers criticized the ride-sharing company’s business model of treating them as contract workers to avoid the costs of paying a minimum wage, overtime, sick leave and health insurance.

O’Connor v. Uber was the first case brought by a group of Uber drivers in 2013 who debated that they should be categorized as employees rather than contract workers.

In 2016, the matter got almost resolved when Uber agreed to pay as much as $100 Mn to the roughly 385,000 drivers represented in the class action lawsuit and one other case, so long as it could continue to classify them as freelancers. However,  the settlement was later rejected by a federal judge, who argued that the amount was insufficient.

Under the agreement, drivers will receive approximately 37 cents per mile for the miles they have driven for Uber. 

Additionally, Uber will create a deactivation appeals process, and help drivers who were deactivated get back on the platform. Drivers who were removed from the lawsuit by the appeals court ruling would need to pursue their claims in individual arbitration if they want any relief.

Liss Riordan, a law firm that is dedicated to vindicating the rights of workers, and fighting for drivers' rights,  quoted in media saying “This is not the end of the issue of driver classification. We are continuing to pursue many cases against gig economy companies (and others) that are mis-classifying their workers as independent contractors, to save on labor costs and shift the risks and expenses of operating a business to their low wage workers.”

Topics: Employee Relations, C-Suite

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