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Uber/Lyft

Uber Pays $20 Million to Settle Driver-Classification Lawsuits

Typically, legal news is bad news for Uber. Today may be an exception. For $20 million, Uber settled two years-long civil suits brought by drivers who wanted to be treated as employees by the company rather than part-time contractors, according to The Verge. One of the plaintiffs’ lawyers representing 13,600 drivers who are part of the settlement said as a result, each one will get a payout of 37 cents per mile that they drove for Uber. The lawyer separately told Bloomberg that she would seek $5 million in legal fees for the lawyers involved.

Several years ago, Uber was willing to settle the main case, which encompassed 385,000 drivers, for $100 million, but that was rejected by a federal judge. Since then, separate rulings by higher courts strengthened Uber’s ability to force its drivers—including most of the drivers in that case—into private arbitration to settle legal claims, rather than allow them to join forces and file class action lawsuits in public court. That’s why only 13,600 drivers ended up in the final settlement.

As Uber and its rival Lyft prep for an IPO, the longstanding question of whether courts will someday mandate the companies treat their millions of freelance drivers as employees—and thus provide them with employment benefits—has continued to percolate. While the fight is not over, as other drivers are trying to challenge their contractor status, executives at the companies probably feel a little safer after today.

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