The $100 million question brought by the recent Uber driver lawsuit in California and Massachusetts is whether drivers using the Uber app should be classified as independent contractors or employees.
According the Uber website and CEO Travis Kalanick, the two sides have agreed that:
- Drivers will remain independent contractors, not employees;
- Uber will pay $84 million to the plaintiffs. There will be a second payment of $16 million if Uber goes public and our valuation increases one and a half times from our December 2015 financing valuation within the first year of an IPO;
- Uber will provide drivers with more information about their individual rating and how it compares with their peers. Uber will also introduce a policy explaining the circumstances under which we deactivate drivers in these states from using the app; and
- We will work together to create a driver’s association in both states. Uber will help fund these two associations and meet them quarterly to discuss the issues that matter most to drivers.
While almost 90% of Uber drivers say they want to be independent, the case, of course, brings up the question of what makes someone an employee. And while Uber and the Uber driver lawyers may have come to one conclusion, it remains to be seen if our governments agree on this determination.