Judge Rejects $100 Million Settlement Proposal In Uber Drivers Class Action

Image courtesy of afagen

The man who ended up as the named plaintiff in a lawsuit of Uber drivers in Califoria and Massachusetts is dissatisfied with the proposed settlement of $100 million to be shared among all class members, and it turns out that the judge in the case doesn’t approve of that offer, either. The judge in the case agrees with him, it turns out, and both sides have been sent back to negotiate a new settlement.

This case is about Uber itself and its relationship with drivers, but it’s also about the idea of the on-demand economy and the idea of an entire workforce that accepts its assignments from an app.

While Uber has made some changes to its app and its back-end, the core issues behind the lawsuit will not be solved before the company simply replaces all of its drivers with autonomous cars.

The first problem, according to the judge, is that the offer low-balls what the class would be owed if the court accepts the premise of the lawsuit.

If drivers were considered employees, and if passengers were encouraged to tip them, the court earlier calculated that they would be due $852 million in expenses, overtime wages, benefits, and of course tips.

However, there’s an incentive for the drivers and their attorneys to settle this case as soon as possible: drivers agreed to waive their right to sue the company when signing up, but the judge in the class action ruled that drivers who signed up after the mandatory arbitration clause became a thing should have the right to sue over being misclassified as independent contractors. Uber has appealed the ruling, and the appeal is still pending.

Both sides will return to court on September 15, perhaps with a new settlement. If the entire class action collapses, that would be great news for Uber, saving it a massive amount of money.

U.S. Judge Rejects Uber’s Proposed $100 Million Settlement With Drivers [Wall Street Journal]
Uber’s $100 Million Driver Pay Settlement Rejected by Judge [Bloomberg] (Warning: auto-play video)