Uber Will Pay Upwards of $100M to Drivers in Settlement

Drivers will remain as independent contractors, not employees

By Andrew Peeling April 22, 2016

uber.jpgRide-hailing company Uber agreed Thursday to pay upwards of $100 million to settle labor lawsuits brought by its drivers who sought to be classified as employees instead of independent contractors.

The settlement comes in response to two class action lawsuits filed in California and Massachusetts. In the agreement, Uber will pay $84 million to its drivers, with a second payment of $16 million if Uber goes public and its valuation increases one and a half times its 2015 valuation. The drivers, however, will remain as independent contractors and not employees.

Uber CEO Travis Kalanick wrote in a news release Thursday that the company was pleased that its drivers would remain independent contractors because it provided them the freedom "to be their own boss."

The company also published its first official driver deactivation policy, dictating when and how the company would bar drivers from using the app due to poor performance and other factors, and the process drivers could use to appeal such decisions.

Uber agreed to a $10 million settlement earlier this month after California prosecutors alleged the company misled passengers about the quality of its driver background checks.

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