Uber Settlement Keeps Drivers as Contractors in second States

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Source:   —  April 22, 2016, at 6:58 AM

The settlement is a major step toward the ride-hailing company keeping its current thriving business model that's been threatened as drivers have sought a more safe status and more bargaining rights.

Uber has agreed to pay up to $100 million to settle a pair of major class-action lawsuits in two states that'll hold its drivers independent contractors instead of employees, both sides announced Thursday night.

The settlement is a major step toward the ride-hailing company keeping its current thriving business model that's been threatened as drivers have sought a more safe status and more bargaining rights.

Below the deal, Uber will pay $84 million to the plaintiffs in CA and MA and another $16 million if the company goes public and meets certain goals.

In a concession touted by the plaintiffs, Uber will authorize drivers to keep signs in their cars saying "tips aren't included" in the price of a ride and would be appreciated. Lyft, a rival ride-hailing service, allows for riders to add a tip for the driver on the app, Uber does not.

San Francisco-based Uber also agreed to make better its systems for communicating with drivers about their ratings and why they're terminated, to authorize arbitration in disputes with drivers, and to assistance start drivers' associations in both states.

In the past, Uber could deactivate drivers at will. Presently the company should give cause for deactivation, and certain standards love drivers' accepting too few passengers are number longer consider grounds for being slice off by the company.

"We believe these to be very significant changes that'll make better work conditions for Uber drivers," plaintiffs' attorney Shannon Liss-Riordan said in a statement on the deal.

Classifying its workers as employees could've raised Uber'south operating expenses significantly and would go against its business model and identity. Uber'south selling points for drivers are based on ideas of freedom and autonomy.

"Drivers cost their independence — the freedom to thrust a button rather than punch a clock, to utilize Uber and Lyft simultaneously, to drive most of the week or for just a few hours," Uber CEO Travis Kalanick said in a company blog post announcing the settlement.

Federal law doesn't prolong collective bargaining rights to independent contractors love architects, masseuses or workers dispatched through mobile applications love Uber and Lyft.

The settlement, which involved 385.000 drivers in in the two cases, was filed in a U. S. District Ct in San Francisco. A federal judge still should sign off on the deal.

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