A labour expert said that this is a fraction of the cost of what Uber could have paid. It’s drivers are being utilised as ‘Contractors not employees’
In a recent class action lawsuit against Uber, the company will have to settle $20Million to it’s drivers in California and Massachusetts. But this has raised concerns over the way the company handles its workers.
In a court hearing on Tuesday, Uber lawyers agreed to the settlement for thousands of drivers. US district Judge Edward Chen is set to hear both sides’ motion on the preliminary settlement on March 21 in his San Francisco courtroom. It is his decision to ultimately decide whether the huge settlement can go forward.
This settlement won’t answer the question whether Ubers drivers are in fact employees or contractors? This is the question that keeps emerging.
Most gig type companies including Lyft, Uber, DoorDash and Instacart sneakily save themselves millions by NOT classifying their drivers or delivery personnel as actual employees. This is a massive year on year saving for all companies involved.
Think about it, they don’t need to pay costs such as retirement, unemployment and health insurance, things we take for granted as ‘real’ employees.
So what are drivers classed as, if not employees? Uber calls its drivers ‘drive partners’
Due to this unethical classification a Lawsuit has been pending since 2003 in the case of O’Connor v. Uber, bringing the argument that many drivers have been unable to claim business expense,s due to being miss classified as ‘contractors’.
The $20Million settlement will cover approximately 11,000 drivers from California and 2,600 from Massachusetts who will equally share in the money.
A statement from a court filing on
In an email to NBC News on Tuesday, Shannon Liss-Riordan, the plaintiffs’ lead attorney said:
“Under this settlement, we estimate these drivers will receive approximately 37 cents per mile for the miles they have driven for Uber (depending on the exact claim rate),”
“This is a substantial recovery, given that the IRS reimbursement rate has varied between 50 and 58 cents per mile.”
Any drivers that wish to claim that aren’t due a settlement will need to do so via a private claim. This is a process which is criticized by labor groups as it favors companies over individuals!
Uber spokesman, Noah Edwardsen told NBC News:
“Uber has changed a lot since 2013,” the company said in a statement. “We have made the driver experience even better through improvements like in-app tipping, a redesigned driver app, an innovative injury protection insurance option, and new rewards programs like Uber Pro. We’re pleased to reach a settlement on this matter and we’ll continue working hard to improve the quality, security and dignity of independent work.”
Though he didn’t answer any questions specifically, he was more generalized about his answer.
The legal battle continues for the gig-economy not just against Uber, but against the whole economy as well. Liss-Riordan said in a statement:
“This is not the end of the issue of driver classification, We are continuing to pursue many cases against gig-economy companies (and others) that are misclassifying their workers as independent contractors, in order to save on labour costs and shift the risks and expenses of operating a business to their low-wage workers.”
The $20Million settlement is a drop in the ocean for Uber, that is reportedly worth a whopping $120Billion! So you could say Uber really won this case.
Only time will tell, as the clock is ticking for a full shakeup of companies like Lyft and Uber. Let’s hope the little guy wins and gets full employee benefits.