Drivers Settle With Uber for up to $100 Million in 2 Class Actions

Uber drivers settled two major class-action lawsuits in California and Massachusetts against the company that will pay up to $100 million to drivers, who will remain independent contractors. Uber CEO and co-founder Travis Kalanick said in a press release Thursday the company will pay $84 million to plaintiffs and pay another $16 million if Uber goes public and its valuation increases to a certain level. U.S. District Judge Edward Chen in San Francisco must still approve the settlement, which avoided a June 20 trial. Drivers sued because they said they were misclassified as independent contractors and required to pay business expenses such as gas and maintenance for their vehicles, and were also denied total proceeds of gratuities that the company advertised as being included in the fare, the California complaint said. "We believe these to be very significant changes that will improve work conditions for Uber drivers," Shannon Liss-Riordan and Adelaide Pagano, the drivers' attorneys in both cases, said in a statement on their firm's Website for the Uber case. For instance, Uber can't fire drivers at will or for low acceptance rates, but only terminate them for "sufficient cause," they said. Uber will also establish appeal panels composed of "highly rated drivers" to hear concerns from drivers, who think they were "unjustly" fired, and help create a "Driver Association" to bring drivers' concerns to management, the attorneys said. Uber will also make clear to riders that tips aren't included in fares, the attorneys said. Some drivers could receive $8,000 or more from the settlement, they said. Uber's Kalanick said almost 90 percent of drivers who choose to work for the company want to remain independent. "That said, as Uber has grown -- over 450,000 drivers use the app each month here in the U.S. -- we haven’t always done a good job working with drivers," he said. For instance, he said, Uber published a driver deactivation policy for the first time in the U.S. and will roll out similar ones globally.