SAN FRANCISCO (AP) – Uber has settled a pair of major class-action lawsuits in California and Massachusetts that will keep its drivers independent contractors instead of employees, the company announced Thursday night.
The settlement is a major step toward the ride-hailing company keeping its current thriving business model that has been threatened as drivers have sought a more secure status and more bargaining rights.
Under the deal Uber will pay $84 million to the plaintiffs in the two states and another $16 million if the company goes public and meets certain goals.
San Francisco-based Uber also agreed to improve its systems for communicating with drivers about their ratings and why they are terminated, and to help start drivers’ associations in both states.
Classifying its workers as employees could’ve raised Uber’s operating expenses significantly and would go against its business model and identity. Uber’s selling points for drivers are based on ideas of freedom and autonomy.