Uber announced that it settled a pair of lawsuits for $20 million. The case of O’Connor v. Uber, was first brought by a group of Uber drivers in 2013 who argued they should be categorized as employees rather than freelancers.
By classifying drivers as contractors, Uber avoids providing benefits of traditional employment such as health insurance, paid sick time, and workers’ compensation.
It was almost settled in 2016, when Uber agreed to pay as much as $100 million to the roughly 385,000 drivers represented in the class action lawsuit and one other case, so long as it could continue to classify them as freelancers.
But the settlement was later rejected by a federal judge, who argued that the amount was insufficient.
Since then, the tide has shifted in Uber’s favor. The US Supreme Court issued a ruling bolstering the power of employers to force workers to use individual arbitration instead of class action lawsuits.
Last year, the Ninth US Circuit Court of Appeals reversed O’Connor v. Uber’s class certification status, nullifying the decision on the ground that Uber’s arbitration clause prohibits class actions. The appeals court ruling ultimately reduced the size of the class to about 13,600 drivers who will participate in the settlement.
Under the current agreement, drivers will receive $20 million, approximately 37 cents per mile for the miles they have driven for Uber.
The settlement still requires a judge’s approval, but Uber is ready to put the past behind it. “Uber has changed a lot since 2013,” a spokesperson said in a statement. “We have made the driver experience even better through improvements like in-app tipping, a redesigned driver app, 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.”