Uber Settlement Struck Down As Inadequate

A federal judge has struck down the $100 million settlement between Uber and its drivers, describing the deal as “not fair, adequate, and reasonable”. The class action case revolved around Uber improperly categorizing drivers as contractors as opposed to employees, a typical tactic of gig economy businesses. The case involved nearly 400,000 Uber drivers in California and Massachusetts. The judge noted the proposed settlement reflected only 0.1% of the Uber’s total liability if the plaintiff’s won at trial and was therefore inadequate. The case has another angle as well in that the Uber’s driver agreement included an arbitration clause that was originally ruled unenforceable but may be overturned on appeal. A win for Uber there would substantially reduce the number of drivers covered by this class action.

This case is a classic illustration of what’s wrong with the US economy. Uber is classifying workers as contractors to avoid paying benefits while at the same time forcing them into arbitration where their rights can be curtailed. And Uber has made it even clearer that they consider their drivers a mere nuisance – today they announced their intention to become a leader in delivering self-driving cars with a trial run in Pittsburgh in the next few weeks. Of course, these are not entirely self-driving as Uber will have a driver sitting behind the wheel just in case something goes wrong. But I’m pretty sure those drivers will be considered contractors.