Uber Settles Class-Action Lawsuit in Mass., Will Pay Up to $100 Million

Photo by Noel Tock on Flickr/Creative Commons

Uber has agreed to pay up to $100 million to settle two major class-action lawsuits in Massachusetts and California, as part of a compromise that would keep its drivers independent contractors.

The ride-hailing company will pay $84 million to plaintiffs in California and Massachusetts, along with an additional $16 million if Uber goes public and certain benchmarks are met. The settlement comes as drivers have pushed for greater protection and bargaining rights.

As part of the settlement, drivers will remain independent contractors, an integral part of Uber’s business model, without collective bargaining rights. In return, drivers will be permitted to display signs in their vehicles reminding passengers that tips are not included in their fare. (Lyft, Uber’s competitor, gives users the option to tip their driver.)

‘‘We believe these to be very significant changes that will improve work conditions for Uber drivers,’’ plaintiffs’ attorney Shannon Liss-Riordan said in a statement, according to the Associated Press.

In a blog post, Uber CEO Travis Kalanick admitted that the company hadn’t done the best job working with its more than 450,000 drivers, but vowed to change.

U.S. District Court Judge Edward Chen must sign off on the settlement in order for the deal to be finalized. Uber still faces similar, albeit smaller cases in other states, including Florida and Arizona.