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Uber has agreed to pay up to $100 million and make several policy concessions to settle a pair of major class action lawsuits with drivers in two states that will keep its drivers as independent contractors instead of employees, both sides announced late Thursday night.
Under the terms of the wage and hour class settlement, Uber will resolve claims with 385,000 drivers in the California lawsuits, O’Conner v. Uber Technologies Inc. and Yucesoy v. Uber Technologies Inc.
The Uber class action settlement is a major step toward the ride-sharing giant keeping its thriving business model that has been threatened as drivers have sought status as official Uber employees. Under the deal, Uber will pay $84 million to the plaintiffs in California and Massachusetts and another $16 million if the company goes public and meets certain goals.
The wage and hour class action lawsuits were closely watched as they sought to force the company to classify drivers as employees, instead of contractors.
As a result of the class action settlement, Uber can continue to treat drivers as contractors but will have to adhere to the following conditions:
- Pay up to $100 million in fees to drivers in California and Massachusetts
- Revise its practice of deactivating drivers from the app with little warning or recourse
- Give warnings before removing drivers from the service
- Allow drivers to post signs in their cars asking for tips
The San Francisco-based company also agreed to improve its systems for communicating with drivers about their ratings and how they compare to other drivers, and explain what can get drivers banned in a newly published policy. Finally, it will also form a driver’s association in these two states and meet with the group quarterly to discuss issues.
In the past, Uber could deactivate drivers without explanation. Now the company must give cause for deactivation, and certain standards like drivers’ accepting too few passengers are no longer consider grounds for being cut off by the company.
“We believe these to be very significant changes that will improve work conditions for Uber drivers,” plaintiffs’ attorney Shannon Liss-Riordan said in a statement on the deal.
The deal settles the two largest wage and hour class action lawsuits Uber faced, counted by the number of drivers involved. However, these aren’t the only two such lawsuits Uber is facing, there are still cases pending in Arizona, Florida and Pennsylvania. Another case in California is still being appealed by Uber.
“[While] the number of drivers using our app has grown dramatically, their reasons for doing so haven’t changed. In the U.S. almost 90 percent say they choose Uber because they want to be their own boss,” CEO and co-founder Travis Kalanick said in a blog post on Uber’s website. “That’s why we are so pleased that this settlement recognizes that drivers should remain as independent contractors, not employees.”
U.S. District Court Judge Edward Chen must still sign off on the deal.
Uber Wage and Hour Class Action Settlement Impact
Properly classifying workers as employees or independent contractors is not a new issue for many California employers like Uber. Unlike employees, independent contractors are not subject to a variety of employment laws, including state-specific wage and hour laws, anti-discrimination laws, and unemployment and workers compensation requirements.
The Uber class action lawsuits mentioned above are representative of the mounting controversy surrounding the company’s contractor business model, with the company insisting it is not a transportation service, but simply a matchmaker between riders and drivers.
And while the ride-sharing company continues to fight additional legal battles over the way it classifies its drivers as independent contractors, not employees, this wage and hour class action settlement could give drivers even more recourse for taking legal action against Uber.
The Uber Wage and Hour Class Action Lawsuits are O’Connor et al. v. Uber Technologies Inc. et al., Case No. 3:13-cv-03826, and Hakan Yucesoy v. Uber Technologies Inc. et al, Case No. 15-cv-00262, in the U.S. District Court for the Northern District of California.
UPDATE: On Aug. 18, 2016, a California federal judge rejected Uber’s proposed $100 million wage & hour class action settlement finding that an arbitration provision included in the agreement may unfairly benefit Uber and deserves further consideration before determining if the deal is worthy of approval.
UPDATE 2: May 2019, the Calif., Mass., Uber driver misclassification class action settlement is now open. Click here to file a claim.
If you believe you were misclassified as a contract worker when you should be an employee, you may have a legal claim. Top Class Actions is running two wage and hour class action lawsuit investigations for employees who live in California and one for those who work in other states across the country. Submit your information today for a free consultation with an employment lawyer.
6 thoughts onUber Settles Two Wage and Hour Class Actions for $100M
When I was driving for Uber 2016 thru 2018. I notice many strange and peculiar happenings occurring almost everyday
1. I was being watched (monitorrd, follow) when I drove for Uber
2. I felt that passengers were hired to ask me certain questions. Same qtestions from different passengers.. What bothered me most, it was those passengers that gave me poor ratings
3. Driving different passengers to the same exact address an them claiming that war their home. It was clear to me that was one of the drtp off places for paid passenger’s (informents).
I have so many more peculiar dissturing issues while working for Uber, but I’m out of time
Good luck Uber drivers.
UPDATE: On Aug. 18, 2016, a California federal judge rejected Uber’s proposed $100 million wage & hour class action settlement finding that an arbitration provision included in the agreement may unfairly benefit Uber and deserves further consideration before determining if the deal is worthy of approval.
the way they stop from driving without notice. than you have to go to san fransico to take a 3 hour test that don’t even apply to your city. also the false rating the customers gives the driver and the driver doesn’t get to explain what happen on the phone to uber. many more issues and top it all pay a $60.00 fee to take the test. someone is making money?compliants carlos fernandez hgpfourme @yahoo.com
I agree we should be able to explain what went on with the ride if the rider gives a poor score. I had a guy wanting t drink an open bottle of whiskey in my car. When i explained nicely Im sorry that is against the law you cant bring the open bottle drinking it in the car he rated me for it!I treat everyone good, we have fun in my car and I have a brand new Cadillac CTS and it stays clean. These people are getting Uber X and getting a new Cadillac. You would think they would be pleased they did not have to choose Select or Black pricing to get it. I usually get great scores, but there is at least one or two girls every week that everything had gone fine and they still rate me poorly purely for the way I look and they are being Catty. I have long blond hair and blue eyes and a new Cadillac and I feel there are just some women theres no pleasing when they are jealous. I feel this is wrong that they should have to give a reason each time they rate below a 5. I want to know what went wrong when the ride has been perfect and in a brand new luxury car for them. I will never understand why people just are mean for no reasoning. I also have had many customer wanting to leave me tip especially them asking me can they leave a tip on their card via the app. This has happened so many times that I have to explain to a customer they cannot leave a tip via the app and that a tip is not warranted. They need to fix that and allow tip and tipping on their card via the app IF the clients want to.
Hadassah brown , first I have three claims the background check the false advertising and the classification
Very ruled