Uber Driv­ers to Re­main In­de­pen­dent Con­trac­tors

Com­pany to pay $100 mil­lion as it set­tles law­suit in Cal­i­for­nia and Mas­sachusetts

The Economic Times - - Around The World -


San Fran­cisco: Uber has agreed to pay up to $100 mil­lion to set­tle a class-ac­tion law­suit which re­solves a ma­jor chal­lenge to its busi­ness model by al­low­ing the ride-hail­ing ser­vice to keep its Cal­i­for­nia and Mas­sachusetts driv­ers as in­de­pen­dent con­trac­tors. The law­suit had claimed that Uber driv­ers are em­ploy­ees and thus en­ti­tled to re­im­burse­ment of ex­penses. The case against Uber had been closely watched in Sil­i­con Val­ley, as other com­pa­nies in the on-de­mand tech econ­omy share Uber’s re­liance on in­de­pen­dent con­trac­tors. The class ac­tion had been sched­uled for a trial in San Fran­cisco fed­eral court in June. “We re­alise that some will be dis­ap­pointed not to see this case go to trial,” said Shan­non Liss-Riordan, an at­tor­ney for driv­ers. How­ever, Liss-Riordan said the plain­tiff driv­ers faced sig­nif­i­cant risks of los­ing if the case moved for­ward, par­tic­u­larly be­cause a fed­eral ap­peals court had re­cently agreed to re­view an or­der al­low­ing Uber driv­ers to sue as a group. Noth­ing about the set­tle­ment pre­vents a fu­ture court, or US labour au­thor­i­ties, from deem­ing Uber driv­ers as em­ploy­ees, she said in a state­ment.

Out of the $100 -mil­lion pro­posed pay­ment, $ 84 mil­lion is guar­an­teed to driv­ers. Uber could also pay an ad­di­tional $16 mil­lion, but only if the com­pany’s val­u­a­tion grows by 150% above its De­cem­ber 2015 fi­nanc­ing round within a year af­ter any ini­tial pub­lic of­fer­ing.

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