Uber, the independent taxi service where you can “drive your car and be your own boss,” has long attracted controversy for classifying its drivers as independent contractors and not employees. Class-action lawsuits claiming that Uber has abused and misused the 1099 form have been filed and certified in courts across the nation, including California, Massachusetts, Arizona, Florida, and Pennsylvania.
Last week, the California and Massachusetts suits settled for the combined sum of $84 million (plus an additional $16 million if the company goes public and its valuation increases 1.5 fold during fiscal year 2016). In exchange, among other concessions—such as increasing transparency for individual driver ratings—drivers in the Golden and Bay States have agreed to remain independent contractors. While $100 million might sound like quite the pretty penny, it is a small price to pay in comparison to Uber’s billions of dollars of annual gross bookings. It is no surprise that many legal commentators (and even Uber itself) view the settlement as a victory. Continue Reading