Uber announced a settlement in two class-action lawsuits against the ride-sharing company: O’Connor(California) and Yucesoy (Massachusetts). The key issue at stake in both cases is whether drivers using the Uber app should be classified as independent contractors or employees.
As part of this settlement, which covers all classification claims involving Uber in California and Massachusetts, the two sides have agreed that:
- Drivers will remain independent contractors, not employees;
- Uber will pay $84 million to the plaintiffs. There will be a second payment of $16 million if Uber goes public and our valuation increases one and a half times from our December 2015 financing valuation within the first year of an IPO;
- Uber will provide drivers with more information about their individual rating and how it compares with their peers. Uber will also introduce a policy explaining the circumstances under which we deactivate drivers in these states from using the app; and
- Uber will work together to create a driver’s association in both states. Uber will help fund these two associations and meet them quarterly to discuss the issues that matter most to drivers.
Uber now has over 450,000 drivers in the U.S.
As part of this settlement, Uber has agreed not to deactivate drivers who regularly decline trips when they are logged into the app.