#68: Uber Settles a Lawsuit

Tech Policy Podcast

TechFreedom

Technology

4.8 • 45 Ratings

🗓️ 26 April 2016

⏱️ 27 minutes

🔗️ Recording | iTunes | RSS

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Summary

Last week, Uber settled a class-action lawsuit alleging that the company misclassified its drivers as independent contractors rather than employees. While the settlement carries no legal precedent, it does mean that Uber can continue with its current business model while paying out up to $100 million to the plaintiffs — with $25 million alone going to attorney Shannon Liss-Riordan, who has sued several gig-economy companies. The rest will be split among roughly 385,000 drivers in California and Massachusetts who can expect an average of $80 each in winnings. Uber also agreed to increase transparency around its driver ratings and deactivation policies, among other concessions. Jared Meyer, a research fellow at the Manhattan Institute, joins to discuss the settlement and what it means for the gig economy going forward.

Transcript

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0:00.0	Welcome to the tech policy podcast. I'm Evan Swartzstraver, your host. On today's show, Uber
0:12.9	settles a lawsuit. What does this mean for Uber and the gig economy as a whole? What does this mean
0:18.9	for the ongoing battles about worker classification,
0:21.6	whether Uber drivers are independent contractors or employees? Joining me to discuss this is our
0:27.3	resident sharing economy commentator and research fellow at the Manhattan Institute, Jared Meyer.
0:32.6	Jared, thank you for joining us. Thanks, Evan. So, Jared, this lawsuit was taking place in both California and
0:40.1	Massachusetts. Tell us about the lawsuit, its parameters, and what happened. Well, what the
0:45.6	plaintiffs were arguing, which were all Uber drivers, was that they were wrongly classified as
0:50.7	independent contractors instead of employees. So what they wanted was Uber to pay all their work-related
0:55.9	expenses that the company would have been on the hook for if they were employees. So, for example,
1:01.7	all their gas, vehicle maintenance, things like that, and giving them certain employee protections
1:06.4	like minimum wage and overtime. So that's not exactly the outcome that happened because it was a settlement.
1:13.3	So while they were searching for that outcome being classified as employees, Uber settled
1:18.7	the case for $84 million, which will be divided among roughly 385,000 drivers in California
1:26.5	and Massachusetts, minus $25 million that goes to
1:30.2	Shannon, Elise Reardon, the attorney who represents these class action drivers and has also been
1:36.6	involved in several cases against Silicon Valley companies like Lyft and others that deliver food like caviar. And so she's going to get a
1:47.3	fat $25 million, but the 400,000 drivers, their earnings are not earnings, their reward is going to be
1:54.1	divided based on how much they drove and how much gas they used. Pretty much around $80 for an average
1:59.2	driver. Oh, well, that's great.
2:06.0	So $25 million to the lawyer, $80 should the driver, so much for income equality.
2:12.2	But also, the $84 million could increase by $16 million, depending on the growth of the company.
	...

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