Drive Wire for August 22, 2016: San Francisco Judge Rejects Uber’s Settlement Offer
In a dispute over whether Uber drivers are employees or contractors, Uber's $84 offer was deemed insufficient.
In news that highlights Uber’s continuing troubles as an employer, US district judge Edward Chen has rejected the company’s settlement of a class action lawsuit related to employee expenses. Essentially, a group of Uber drivers contended that they are in fact employees and entitled to expenses—that is, reimbursement for costs like fuel and vehicle maintenance that under Uber’s current system fall on the drivers themselves.
The settlement proposed by Uber would have kept Uber drivers classified as independent contractors, not employees, at a cost to Uber of just $84 million—far less than the total potential damages of $850 million. Now, the two parties have the chance to attempt to reach an agreement that pleases the court; if not, the case will go to trial. However, even if a settlement is reached, it’s likely drivers unsatisfied by Uber’s—at times tenuous—claim that they are private contractors and untitled to a traditional roster of benefits and privileges will continue to chafe against their working conditions.