Uber has reached a settlement agreement with its drivers in California and Massachusetts, according to a statement from the attorney representing drivers in the two cases.
The $100 million settlement effectively staves off what could have been a massive legal fight over the employment classification of about 385,000 Uber drivers in the two states.
The statement from attorney Shannon Liss-Riordan, says the settlement will allow Uber to continue recognizing those drivers as independent contractors, not employees, and pay $100 million.
Of that amount, $84 million is guaranteed, and the remaining $16 million "is contingent on an increase in Uber's future value," the statement noted.
Here are some of the terms of the agreement:
- Uber will no longer be able to deactivate drivers at will. Under some circumstances, drivers may be warned and given an opportunity to correct any outstanding issues.
- Drivers will be allowed to solicit tips from passengers.
- Uber will recognize the formation of a "Drivers Association" led by fellow Uber drivers who will discuss concerns and bring them to the attention of Uber management.
A San Francisco jury trial on the matter had been set to start in June, but that could be taken off the table if the judge presiding over the case approves the agreement.
In her statement to Business Insider, Liss-Riordan said "We realize that some may be disappointed not to see this case go to trial," but she cast the proposed settlement as a victory that "provides significant benefits — both monetary and non-monetary — that will improve the work lives of the drivers."
Lyft earlier this year agreed to pay its drivers more than $12 million to settle its own driver-classification dispute. Liss-Riordan represented drivers in that case, also.
