In 2016, Uber was forced to pay $100 million and recalled 1.18M vehicles after the company’s self-driving car killed a pedestrian in Arizona. In 2017, they settled out of court for an undisclosed amount with the family of that woman who died in the crash. This article explains how these events unfolded from lawsuits all the way through settlement talks and what this means for future litigation involving autonomous cars
Uber is currently facing a lawsuit and the company is offering to settle with drivers. Uber has also issued a recall on cars that were sold in 2021. Read more in detail here: uber settlement checks 2021.
(As of October 31, 2017)
Several states have filed class action lawsuits challenging whether Uber drivers are independent contractors, as Uber asserts, or employees, as many drivers believe.
Uber drivers are obliged to pay for job-related expenditures such as petrol, insurance, and vehicle maintenance as independent contractors. However, drivers claim that they are treated like workers and that they should be recognized as such, allowing them to receive business cost reimbursements, gratuities, and other perks. Drivers also want more information about how Uber makes certain choices regarding them.
Uber drivers claim that they should be treated as Uber workers, with salary protections and other benefits.
To resolve two Uber class lawsuits in California and Massachusetts, Uber promised $100 million in compensation. Uber drivers would continue to be independent contractors under the arrangement, but they would be entitled to remuneration. U.S. District Judge Edward Chen rejected the settlement, arguing that the amount was much too modest to resolve a lawsuit that might end in $1 billion in fines.
Drivers complain about a lack of information and tips.
Uber Technologies, Inc. is a ride-hailing firm located in San Francisco that connects passengers with drivers who run their own cars, similar to taxis, using a smartphone app.
Uber is a $60 billion company that operates in hundreds of locations across the globe. Uber drivers are suing the firm in a number of states, alleging that the corporation abuses them by designating them as independent contractors and requiring them to pay for all of their own business costs while still paying Uber fees of 20-30%.
Drivers also say that Uber does not provide them with adequate information about crucial corporate regulations, such as deactivating drivers from the Uber platform without notice or redress.
Finally, Uber drivers want the ability to solicit gratuities from customers, which they claim is prohibited by company policy.
Uber May Owe Benefits to Drivers
The basic focus of the Uber complaints is that workers should be categorized as employees, which would provide them access to job-related expenses like car insurance and maintenance.
Reclassifying Uber drivers as employees, on the other hand, may compel the company to provide extra worker benefits like as health insurance, workers’ compensation, and a minimum pay.
The future of independent contractors in the “sharing economy” as a whole is at risk, not just the Uber/driver connection.
A verdict in favor of the plaintiffs, on the other hand, might limit the self-employed flexibility that many Uber drivers claim to enjoy. As employees, Uber drivers, for example, may be required to work predetermined shifts (rather than setting their own schedule) and may be unable to drive for rival ride-sharing firms (such as Lyft).
The sustainability of the Uber/driver relationship, as well as the future of independent contractors in the “sharing economy” as a whole, is at risk. Many internet businesses use a business model based on 1099 employees, comparable to Uber’s. The Uber class action cases’ success might lead to similar litigation against other corporations that depend on contract workers.
GrubHub, DoorDash, Instacart, and Homejoy, for example, are already facing litigation identical to the ones Uber is defending. The result of the Uber litigation might have ramifications for all other issues involving the sharing economy.
Uber’s $100 million settlement has been rejected by a judge.
Uber settled two class lawsuits in California and Massachusetts in April 2016, representing 385,000 drivers. Eligible drivers would have remained contractors under the terms of the settlement, but would have been entitled to a part of the $100 million depending on the amount of miles they drove. Uber has committed to partly support a “Drivers Association” and offer more information on why certain Uber drivers are deactivated.
Hundreds of drivers filed challenges to Uber’s settlement, including the principal plaintiff, driver Doug O’Connor, who dismissed his attorney and hired new counsel.
Mr. O’Connor said in a legal complaint to the court that the contract “is not in my interest or in the interest of any Uber driver.”
The settlement was denied by U.S. District Judge Edward Chen in August 2016, who said it was not “fair, sufficient, or reasonable” for drivers.
Judge Chen rejected the settlement because the sum provided to drivers was just 10 percent of what the complaint claimed they were entitled. He also noted that Uber will pay just $1 million in state fines, which might potentially amount more than $1 billion, under the conditions of the agreement.
Uber settles FTC charges for $20 million.
Not settlements in cases, but conclusions by state labor commissioners that, although not legally enforceable, send a message to Uber about the outcome of future claims.
Uber agreed to pay $20 million to resolve claims brought by the US Federal Trade Commission (FTC) that it had misrepresented the amount of money its drivers would make in order to recruit new drivers. According to the Federal Trade Commission (FTC):
… Uber said on its website that the yearly median income of uberX drivers in New York was more than $90,000, and in San Francisco, it was more than $74,000. However, the FTC claims that drivers’ yearly median income in New York was $61,000 and $53,000 in San Francisco. In all, fewer than 10% of all drivers in those locations made the annual salary that Uber advertised.
The California Labor Commission determined in June 2015 that an Uber driver was an employee, not a contractor, and granted the driver almost $4,000 in cost reimbursements. Uber, on the other hand, has filed an appeal, and the matter will be heard in court.
In Oregon, the state’s labor commissioner issued an advisory opinion declaring Uber drivers to be workers. Uber challenged the findings, claiming that crucial details were not given enough attention.
Uber has quietly resolved claims for the behavior of its drivers, including two sexual assault cases and one wrongful death case, while claiming that they are independent contractors and not employees. These agreements recognize the company’s liability for its drivers.
The “suing uber for car accident” is a lawsuit that Uber has been involved in. The case was settled, and the lawyers were able to get their clients a free ride.
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