LOS ANGELES (AP) – It will cost Uber up to $100 million and took some significant policy concessions, but the ride-hailing company is forging forward with its thriving business model by keeping its drivers independent contractors, for now.
Uber settled major class-action lawsuits in California and Massachusetts that sought employee status and the rights that come with it for drivers, both sides announced Thursday night.
Under the deal, Uber will pay $84 million to the plaintiffs in California and Massachusetts and another $16 million if the company goes public and meets certain goals.
In a concession touted by the plaintiffs, Uber will allow drivers to put signs in their cars saying “tips are not included” in the price of a ride and would be appreciated. Lyft, a rival ride-hailing service, allows for riders to add a tip for the driver on the app; Uber does not.
San Francisco-based Uber also agreed to improve its systems for communicating with drivers about their ratings and why they are terminated, to allow arbitration in disputes with drivers, and to help start drivers’ associations in both states.