Uber proposes $20M settlement of driver classification suit

Uber

Uber has offered to pay $20 million to settle a lawsuit brought by its drivers, according to court documents. If the judge ruling over the case accepts the proposal, it would bring to a close one of the company’s longest running court battles and definitively classify its drivers as independent contractors, rather than employees.

The ride-hailing company is expected to have an initial public offering this year and has been working to settle many of its legal disputes over the past few months. Having resolved these matters will help Uber look like a less risky company to investors. 

This is Uber’s second attempt to settle the suit. It’s first offer was in 2016 for $100 million, but US District Judge Edward Chen rejected that proposal as unfair, inadequate and unreasonable. 

“We are pleased to have reached this settlement on behalf of the relatively small number of Uber drivers from California and Massachusetts who are not covered by an arbitration clause,” said the attorney representing the drivers, Shannon Liss-Riordan.  “Under this settlement, we estimate these drivers will receive approximately 37 cents per mile for the miles they have driven for Uber.”

“This is not the end of the issue of driver classification,” she continued. “We are continuing to pursue many cases against gig economy companies (and others) that are misclassifying their workers as independent contractors, in order to save on labor costs and shift the risks and expenses of operating a business to their low wage workers.” 

Uber didn’t immediately return request for comment.

This story is developing.

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