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Drivers will remain as independent contractors, not employees
Ride-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.
California Judge Denies Lyft's $12.25M Driver SettlementA California judge rejected ride-hailing company Lyft's $12.25 million settlement of a class-action lawsuit, saying the settlement "shortchanged" its drivers.
Adapt Travel Policies for ‘Sharing Economy’ UsersServices like Uber and Airbnb are examples of the rapidly expanding “sharing economy,” a collaborative consumption model where peers share their resources and time.
Employees’ Use of Sharing Economy Poses RisksThe sharing economy is booming, but employers shouldn’t require employees to use it on work trips, according to Linda Hollinshead, an attorney with Duane Morris in Philadelphia.
Up to Juries: Uber, Lyft Drivers’ Status as Employees or ContractorsIn two cases stretching the boundaries of what it means to be an employee, juries will decide whether Uber and Lyft drivers are employees or independent contractors.
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