In what could set a precedent of sorts across all of Uber’s global operating locations, the ride-hailing giant has announced that they have settled their long running drivers’ dispute in the US. The case revolved around classifying drivers as independent contractors, and has been settled for $20 Million.
The case came up in 2013, when a group of Uber drivers argued that they should be considered as employees rather than freelancers. Uber was able to avoid paying drivers basic employee benefits such as paid sick time, health insurance and workers’ compensation due to the classification that the company had provided to its drivers.
Uber stated that they are focused on making “the driver experience even better through improvements like in-app tipping, a redesigned driver app, and new rewards programs.” Uber also added that they’ll continue to work hard to improve the quality, security and dignity of independent work.
The central lawsuit initially posed a threat to Uber as it grew to represent as many as 385 thousand drivers in California and Massachusetts after a class-action status was granted by a San Francisco judge. The case however shifted in Uber’s favor when the US Supreme Court issued a ruling bolstering the power of employers to force workers to use individual arbitration instead of class action lawsuits.
“This is not the end of the issue of driver classification,” Liss-Riordan said in an email. “We are continuing to pursue many cases against gig economy companies that are misclassifying their workers as independent contractors, in order to save on labor costs and shift the risks and expenses of operating a business to their low wage workers.” She further added.
