Uber settles two lawsuits to keep drivers as independent contractors

Uber settles two lawsuits to keep drivers as independent contractors

App-based ride-hailing service Uber recently reached a landmark settlement in two class-action lawsuits that will make the company pay nearly $100 million to drivers in California and Massachusetts, but will allow it keep categorizing drivers as independent contractors.

Some disgruntled Uber drivers had sued the company, seeking improved working conditions in addition to being categorized as employees, rather than as independent contractors. It may be noted here that workers categorized as employees enjoy many more benefits than independent contractors under states’ laws.

The company agreed to settle the disputes by paying $84 million to nearly 385,000 drivers in the two states in addition o paying additional amount of $16 million if its market value jumps at least 1.5 times from its December 2015 valuation within a period of one year.

But, the company managed to convince the workers to drop their demand for their re-categorization as employees. The company claimed that some drivers told officials that they would quit if the company tried to categorize e them as employees because they value their freedom as an independent contractor very much.

Meanwhile, labor union Teamsters has announced that some disgruntled Uber drivers have sought its assistance to strengthen their voice and force the ride-hailing company to improve benefits and working conditions for them. Previously, the union successfully negotiated strong contracts for the drivers of numerous tech companies, including Facebook, Apple and Google.