Uber Technologies Inc. agreed to pay $ 20 million to settle a lawsuit filed by drivers nearly six years ago, according to court documents, resolving one of its many legal battles with drivers ahead of a much-anticipated initial public offering this year.
Ride company drivers who argued in the lawsuit are employees, not independent contractors, as Uber has classified them, and are therefore entitled to benefits and reimbursement of their expenses. The settlement amount is one-fifth of the $ 100 million settlement offer Uber proposed in 2016 to settle the case., which District Judge Edward Chen rejected at the time as an inappropriate amount.
The new deal, which has yet to be approved by Chen, was filed in federal court in San Francisco on Monday night.
The demand is central to a widespread debate about so-called shift economy workers, the workforce assigned by technology platforms such as food delivery and transportation services. Workers in the gigantic economy have often argued that they should receive better wages and benefits, and be treated like employees.
A California Supreme Court ruling last year made it much more difficult for companies like Uber to argue that their drivers are independent contractors, posing a threat to Uber’s business model.
The Uber settlement covers drivers in California and Massachusetts who have driven by Uber From August 2009 to February this year, according to the presentation. The class is much smaller than it was in 2016 when the initial settlement offer was made.
Following Chen’s rejection of that offer, Uber won an appeals court ruling confirming that the company’s arbitration agreements are largely valid and enforceable. That forced most of the drivers to arbitration and reduced the size of the class involved in the class action lawsuit.
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