Uber offers a $1-a-driver deal to have CA labor code claims dismissed
- Uber Technologies Inc. moved to settle its worker classification suit by giving drivers a total of $1.7 million (after the state takes its share) to make the alleged labor-code violations go away, reports Bloomberg.
- The drivers’ lawyer and Uber asked a California judge in Los Angeles to approve a $7.75 million agreement to settle claims based on its refusal to pay drivers the pay and protections offered to employees. Uber may still classify the drivers as independent contractors under the agreement.
- Plaintiff Steven Price hoped to represent 1.6 million California drivers in a class-action suit. He brought his claims against Uber under California’s “bounty hunter” law, which allows employees to bring enforcement actions the way the state labor secretary does.
Uber could come out ahead dollar-wise if its settlement offer holds up in the Los Angeles agreement. Damages originally were estimated to be in the billions. The company has experienced wins and losses in court, but so far seems to be on a success streak, as they also recently saw success in Miama, FL.
If Uber doesn’t address allegations of labor violations, new cases could emerge later. But as of right now, since the settlement would allow the company to maintain the independent contractor classification of their employees, Uber's business model remains intact.
The rise of the independent contractor is well-documented in the gig economy, but outside the gig economy, more companies have been turning to contingent work to cover talent gaps and save money on benefits in the process.