Uber has settled a long-running class-action lawsuit with drivers, NBC reports.
O’Connor v. Uber, filed in August 2013, argued that thousands of drivers were wrongly classified as independent contractors instead of employees. Uber, like other “gig economy” companies like Lyft, Instacart, TaskRabbit, and so on do not pay health insurance, retirement, or other benefits that employees traditionally receive.
Lawyers for Uber said Tuesday they had agreed to a settlement with drivers and plan to pay out $20 million, or about 37 cents per mile driven by the drivers involved. U.S. District Judge Edward Chen will decide whether the settlement can go forward after hearing both sides on March 21.
Uber is attempting to clean up its image in preparation for an IPO, the New York Times reported. Uber’s chief legal officer Tony West has conducted a review of how many passengers had been sexually assaulted during Uber rides to create a transparency report and worked to settle some of the company’s largest lawsuits.
The recent settlement with drivers, if it is approved, will be “mostly a win for Uber,” labor law professor Michael LeRoy told NBC. $20 million for a company worth around $120 billion is a small price to pay, and Uber will continue to classify its drivers as contractors.
The settlement is lower than the $100 million Uber offered in 2016, Engadget reports, but since then, the number of drivers in the class-action suit has shrunk. The original suit involved 385,000 drivers, and the previous offer would have seen some drivers get a total reimbursement of $12. Since then, Uber won an appeals court ruling that knocked most of the drivers out of the class-action suit. Now that the suit now covers only 13,600 drivers, $20 million will give individual drivers more than they would have received under the previous offer.
Separately, last week Uber settled charges in the Netherlands related to violating local taxi laws from July 2014 to November 2015, TechCrunch reports. Uber was operating UberPOP (one of the brand names it used for non-licensed taxi ride-hail services) in a country that required transport services to have a taxi license.
The Dutch Public Prosecution Service announced that Uber will pay a €2 million fine and €309,409 in “criminally earned capital,” aka the 20 percent commission Uber collected on rides. Also, “the person responsible for the rollout of UberPOP in the Netherlands has performed a 90-hour [community service] penalty,” the DPPS said in a statement, according to TechCrunch.
Uber shut down UberPOP in the Netherlands and now only allows certified, licensed drivers to use the app. And in 2017, Europe’s highest court affirmed that Uber is, in fact, a transportation company, not “just a platform,” and it must be classified as such across the EU.
The company is still dealing with hundreds of pending legal cases, the New York Times reported.
Rachel Kaufman is Next City's senior editor, responsible for our daily journalism. She was a longtime Next City freelance writer and editor before coming on staff full-time. She has covered transportation, sustainability, science and tech. Her writing has appeared in Inc., National Geographic News, Scientific American and other outlets.