Uber will pay $84 million to neutralize two massive lawsuits that posed a threat to its business model and make a handful of small but significant changes to driver policies, the company announced late Thursday. The settlement payout amounts to just over $200 apiece for the 385,000 or so Massachusetts and California drivers represented in the cases – before factoring in attorneys’ fees. The drivers had alleged that the company treats them like employees but pays them like independent contractors, an illegal business practice called misclassification that saves companies huge sums of money because contractors are entitled to fewer labor law protections. The deal is a win for the company: Drivers will remain contractors, saving the company from paying payroll taxes, minimum and overtime wages, and reimbursements for driver expenses. And for a company with over $60 billion in on-paper value, a potentially $100 million deal barely dents the piggy bank. Uber CEO and Co-Founder Travis Kalanick, the company is “so pleased that this settlement recognizes that drivers should remain as independent contractors, not employees.”
— source thinkprogress.org