TechCrunch has learned that Uber has offered a tentative settlement to pay out 11 cents for every mile driven for Uber( including adjacent services like Uber Eats) to motorists who have been in individual arbitration with the company over employment opportunities category. Motorists were seeking individual arbitration after an appeals court ruled in September that they could not combining their cases into a class action lawsuit.
Uber has declined to comment for this story, and one of the firms representing motorists, Lichten& Liss-Riordan, has still not been responded to our is asking for comment.
In a lawsuit that now goes back times and embraces nine states, some 160,000 drivers had been seeking to be classified as employees rather than independent contractors, partly in order to get compensated for the costs related to driving for the company, such as gasoline utilized and vehicle maintenance.
Another big complaint in the case involved tips-off: motorists said Uber would not allow them to take or maintain tips from passengers.( The allegation predated June 2017, when Uber formally introduced tips in its app, netting some $600 million extra for drivers in one year .)
Uber’s settlement of 11 pennies per mile for all on-trip miles that were driven for Uber shunts addressing those specific details. Notably, drivers who accept the settlement sign the documentation to freeing all asserts against Uber related to employee misclassification.
The settlement is tentative depending on sufficient numbers of drivers signing the agreement( we do not know what the minimum “wouldve been” — so if you’re a relevant motorist, you should check your mailboxes and respond if you crave compensation ), among other factors, and it is able to take up to six months for pays to get to drivers.
On one hand, this an okay result in what was a challenging situation for litigating motorists. A class action lawsuit, mixing several people into one case, would have gained economies of scale in terms of legal expenditures, and that could have meant a stronger recovery payout for the group.
But with the appeals magistrates striking down that possibility, it would have been left to individual drivers to pursue their own occurrences against the company. That is an expensive and time-consuming process and might not have seen as many plaintiffs willing to fight.
It may have been unpalatable for Uber, too. With the company gearing up for a public listing and all the scrutiny that comes with that, describing a line under these cases with a settlement is a better make than multiple, years-long arbitration cases.
It’s also an important step along Uber repairing its image with current and potential drivers.
The company went through a huge crisis last year that highlighted questionable management and bad corporation culture when it came to female employees, treatment of drivers, interfacing with regulators and more.
( In fact the tipping was introduced as part of the company’s wider efforts to fixing its the enterprises and image among drivers, passengers and employees. It also included appointing a new CEO.)
Having a loyal and growing base of motorists is essential to Uber scaling its business, and this settlement is one signal to drivers that Uber is trying to do right by them.
Still, it seems that the bargaining power here may have been more on Uber’s side.
Uber, evaluated at $72 billion as of its last funding and potentially as high as $120 billion in an IPO, is one of the world’s biggest privately-held tech companies. The 11 pennies per mile it’s offering as a village is estimated to be only one-third of what a driver have been able to recovered for just one of the claims, expense reimbursement, had he or she pursued the arbitration rather than opted for the settlement.
Securing rights for the growing number of contract laborers in the labour markets has is an element of the most controversial particular aspects of the boom in “gig-economy” business. It will be interesting to see how and if more of these kinds of cases come to sun, and if regulators start to wade in, in cases where employers have not.