Uber settles with drivers without compromising on their contractor status
Uber Technologies has arrived at a settlement with drivers in two lawsuits that could see the company paying up to $100 million, but without a change in the classification of its drivers from independent contractors to employees.
The settlement, submitted in court Thursday, is a big boost for the ride-hailing app company as driver reclassification would have raised its costs in terms of employee benefits as well as set a precedent for similar court disputes against on-demand companies that typically use contract workers.
As part of the settlement, which covers the classification claims involving Uber in California and Massachusetts, the two sides have agreed that drivers will remain as independent contractors and not employees, the company’s CEO Travis Kalanick said in a blog post. He said an $84 million payment to the drivers could see a top up by $16 million depending on Uber's valuation if it goes public.
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