Uber Transport Firm Settles $100 Million Over ‘Employee Status’
22 Apr, 2016
Following an ongoing case since 2015, taxi competition firm Uber has agreed to settle for as much as $100 million. According to Uber’s website, around 450,000 drivers use the Uber app in the US every month.
The case began last year with a focus on individuals claiming to be employees of Uber rather than contractors. Uber drivers wanted to be deemed status of employee in order to gain certain further rights. Almost a year later, Uber is relieved to settle but critics are disappointed that the case has not reached trial.
US District Judge Edward Chen in San Francisco must now approve the settlement for it to go ahead.
The head of Uber, Travis Kalanick said in a blog post that he is pleased with the settlement as his company’s drivers will continue to operate as independent contractors.
“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 commented. He did however point out that Uber has not always “done a good job working with drivers. It’s time to change.”
Uber has now restructured its policies to allow more transparency when informing drivers of contract termination, the issue that had spurred the first case last year. Of the proposed settlement cash, $84 million will go to the Uber drivers involved, while a further $16 million will also be brought forward if the company goes public and increases its worth one and a half times from its 2015 December worth within the first year.
According to the BBC, lawyer Shannon Liss-Riordan, involved in the case, said there may be disappointment spread over the case as it did not reach court, but says there may have been a “significant risk of losing” if the case had moved forward.
Ms Liss-Riordan did clarify also that the settlement does not prevent court, or US labour bodies, classing Uber drivers as employees.