On Thursday, Judge Edward Chen dismissed Uber’s proposal to settle the large-scale class action lawsuit for $84m, concluding that the proposed sum was ‘not fair, adequate or reasonable’ given the scale of the complaint against Uber. Prior to the proposed and mutually-agreed settlement the lawsuit had been due to appear before a jury in June, with the complaint’s class action status still pending in the ninth circuit court of appeals. With the future of the lawsuit now in doubt and with some predicting that Uber may win its appeal against the class action certification, the scope and scale of the action against Uber could be whittled down from 240,000 drivers to as few as 8,000 if a new settlement isn’t reached and approved in the near future.

Settlement criticism

The class action lawsuit hinges on the question of whether Uber drivers are classed as independent contractors or employees of the company. By calling its drivers ‘contractors’, Uber is able to side-step considerable costs including minimum wage, overtime, health benefits and reimbursement of expenses. Crucially, the proposed $84m settlement would have permitted Uber to continue classing drivers as contractors. Moreover, labour groups have criticized the size of the settlement given that it is estimated that Uber could be forced to pay out around $852m if it were to lose the case in court. In his ruling, Judge Chen called into the question the real value of the settlement’s non-monetary concessions – such as that Uber will allow passengers to tip their drivers – while also noting that, in monetary terms, each class action plaintiff would only pocket around $100 from the proposed settlement.

‘Disappointed’

A spokesperson for Uber commented that the company is ‘disappointed’ with Judge Chen’s decision on the settlement, which it believes to be ‘fair and reasonable’. Plaintiffs’ attorney Shannon Liss-Riordan, who originally described the proposed settlement as ‘one of the largest ever achieved on behalf of workers claiming independent contractor misclassification’, has said that plaintiffs are willing to pursue their cases individually if a settlement isn’t approved and the lawsuit’s class action status falls through. ‘More than 1,000 drivers in California have already signed up to bring individual claims in arbitration if that becomes necessary,’ she said. 

Sources: The Guardian; BBC