Uber To Pay Drivers $20 Million To Settle Driver Classification Lawsuit

It seems like the battle between Uber and drivers over driver classification lawsuit has come to an end as the ride-sharing service company agreed to pay $20 million for settlement. To Uber, this resolution is a good thing as it is getting ready for its initial public offering later this year.

O’Connor v. Uber, the initial case, was first brought up by an Uber driver group back in 2013. These drivers argued that rather than being categorized as freelancers, they should be classified as employees instead. By putting drivers in contractor category, Uber does not have to provide them with traditional employment benefits like worker’s compensation, paid sick time, and health insurance.

For more than six years, O’Connor v. Uber has still been in the courts’ file. In 2016, a settlement was almost reached as Uber agreed to pay $100 million to about 385,000 drivers in the classification lawsuit and another case. But with this settlement, drivers would still be classified as freelancers. A federal judge later rejected the settlement, stating that the amount of money was insufficient.

Since then, the situation has changed to a direction that is more beneficial for the company. A ruling reinforcing the employers’ power was issued by the US Supreme Court to pressure workers into using individual arbitration rather than class action lawsuits.

Last year, the class certification status of the case was reversed by the Ninth US Circuit Court of Appeals, ruling that the arbitration agreements of Uber were valid. With this decision, the number of drivers in the class was reduced to around 13,600 drivers.

In an interview with TechCrunch, a driver said:

But for attorney Shann Lis-Riordan, “This is not the end of the issue of driver classification.” Although she is pleased that an agreement has been reached but it is just for a small group of drivers.

In a statement, she said:

Meanwhile, she’s still actively following other cases against Handy, Postmates, DoorDash, Lyft, GrubHub, Amazon and many more. She said: