‘It’s almost criminal’: Uber’s $100m driver payout could have been $852m

Uber could have been forced to pay $852m in damages to California and Massachusetts drivers if it had lost the landmark class-action lawsuit over employment classification that the company settled in April for up to $100m, according to new court documents.

The disclosure of the potential value of the lawsuit will likely reignite anger among some Uber drivers who have expressed suspicion that the settlement falls short of what they are owed by the $62.5bn company.

The proposed settlement, which guaranteed plaintiffs $84m but could increase to $100m based on Uber’s valuation, would avert a much anticipated jury trial over the question of whether Uber drivers are rightly classified as independent contractors or employees, but only if it is approved by federal judge Edward M Chen.

On Friday, judge Chen ordered Uber to reveal previously redacted information about the potential value of the lawsuit’s claims, citing “the public’s significant interest” in information that can allow them to assess “the fairness and adequacy of the settlement”.

About three dozen drivers have filed official objections to the settlement with the court, expressing dissatisfaction with the monetary amount as well as with the fact that the settlement allows Uber to continue to classify drivers as independent contractors.

“The recent agreed settlement of $100m … has made an astounding amount of Uber drivers upset and oppose the measly settlement,” reads one objection from former Uber driver Nick Guillermo, who goes on to call it a “quick cash grab” on the part of the plaintiff’s attorney, Shannon Liss-Riordan.

Joel Unger, an Uber driver in the San Francisco Bay Area who runs a popular forum for drivers on Facebook, called the settlement a “scam of epic proportions” in a message to the Guardian. “It’s almost criminal,” Unger added.

For her part, Liss-Riordan defends the size of the settlement.

“Depending on how you measure it, the recovery we obtained through this settlement is up to 29% of the actual damages we might have obtained if we had won at trial,” she said Monday.

The potential value of the settlement would depend on whether a jury chose to reimburse drivers based on the IRS’s fixed rate (from 50 to 56.6 cents per mile) or variable rate (from 16.5 to 24 cents per mile). If the former, the total mileage damages for California and Massachusetts drivers could total $700m, while if the latter, the mileage claim would only total $277m.

The filings also estimate that drivers could have won $30m in damages for unreimbursed cell phone expenses and $122m in damages for “unlawful taking of gratuities”.

Liss-Riordan pointed out that winning in court was by no means guaranteed, especially considering that the ninth circuit court of appeals had granted Uber an appeal that likely would have delayed the trial and could have cut the size of the California class from more than 240,000 drivers to just 8,000 or fewer.

In January, Uber rival Lyft reached a proposed settlement of $12.25m for a similar class action suit brought by Liss-Riordan. In April, a federal judge rejected the settlement, which he said “short-changed” drivers based on estimated reimbursement damages of $126m.

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