Most Uber Drivers to Get Less Than $25 From Big Settlement

Uber drivers made news last week when the company settled class-action suits that could pay drivers as much as $100 million, but court documents show that most eligible drivers will probably get less than $25.

The suits covered Uber drivers in California and Massachusetts who said they were not independent contractors, as Uber claimed, but employees.

Uber contends its app is merely a conduit between drivers and riders and that it does not employ drivers. Its business model is based on that presumption, which keeps its costs low.

In the settlement filed in U.S. District court in Northern California on April 21, Uber agreed to pay the plaintiffs $84 million, with a second payment of $16 million if the company goes public and its valuation increases one and a half times from that of Dec. 2015.

However, most drivers who were eligible for the settlement will see very little of that amount.

Payouts depend on how many miles the driver drove with Uber and whether he or she opted out of Uber’s arbitration clause in its 2013 and 2014 driver agreements. More importantly, all estimates depend on how many eligible Uber drivers actually file to claim the money. The more who do, the lower the amounts that will be paid out.

A small number of drivers will get on average $8,000. They will include California drivers who drove more than 25,000 miles with Uber and who opted out of the arbitration clause in the 2013 and 2014 Uber driver agreements, according to court documents.

The $8,000 presumes that about half of eligible drivers will file to claim their money. If more file, the amount the drivers are paid will fall.

Drivers who drove fewer than 750 miles and who signed the arbitration clause could receive as little as $24. That figure is based on 100% of drivers filing to take part. If fewer do, the number could increase.

The lawyers who brought the case intend to apply for fees and costs of no more than 25% of the settlement. That would be $21 million of the $84 million but $25 million if Uber goes public and does well, court documents show.

DEACTIVATION POLICY

Uber agreed to other changes that will affect all drivers, not just those in California and Massachusetts.

One is a “comprehensive deactivation policy” that requires Uber to only cut drivers off from using its app for “sufficient cause” according to court documents. Drivers must be given at least two warnings prior to being cut off, except for reasons of safety, fraud, discrimination or illegal conduct. They must also be given a reason for being deactivated in writing.

Uber also agreed to give drivers more information about how its star ratings and ranking systems work..

It will also fund and facilitate a Drivers Association in California and Massachusetts that will allow drivers to elect leaders who will meet on a quarterly basis with Uber to address issues faced by drivers.

UBER AND TIPS

The settlement also confirmed that Uber’s policies don’t prohibit drivers from requesting tips.

It required Uber to clarify on its website and in communications with both drivers and riders that tips are not included on Uber’s app, except for UberTAXI, and that “tipping is neither expected nor required,” according to court documents.

Not only are the amounts drivers might get small, but the settlement doesn’t address what Scott Solombrino, co-founder of the National Limousine Association, called the underlying issue of drivers misclassified as either independent contractors, rather than employees.

“This is about protecting the American worker.  Uber effectively controls their drivers as employees, but refuses to fairly compensate them (e.g. overtime, workman’s compensation, health care),” he said.

Source: www.wtsp.com www.wtsp.com

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