Settlement reached in Uber independent contractor suits

Two potentially ground-breaking class action lawsuits that could have radically altered the relationship between Uber and its drivers ended on April 21 with a soft whimper instead of a loud bang when attorneys for the plaintiffs and Uber announced that they had reached a settlement.

Plaintiffs in the two suits, one in California, the other in Massachusetts,  argued that they are employees entitled to all rights and protections afforded to employees by US labor law ( social security, unemployment insurance, workers compensation, overtime pay, etc.) and not as Uber prefers to call them independent contractors.

The settlement does not definitively resolve the question of whether Uber drivers are employees or contractors.

But the plaintiffs’ attorney Shannon Liss-Riordan said that there will be other opportunities to win labor rights for Uber drivers.

“The case (has been) settled–not decided,” said Liss-Riordan. “No court has decided whether Uber drivers are employees or independent contractors and that debate will not end here.”

One of the two suits would have been heard in San Francisco, Uber’s home base, and Liss-Riordan said that it was too risky to let a jury in San Francisco determine the employment status of the company’s drivers.

As part of the settlement, Uber agreed to pay up to $100 million.. The bulk of that money will go to compensate eligible drivers.

Those eligible include drivers in California and Massachusetts who opted out of the clause in their contract that forbids them from joining class action suits.

Liss-Riordan estimates that about 385,000 drivers will be eligible for compensation but not all will file claims.

The amount of money eligible drivers receive depends on the number of miles that they have driven for Uber and where they work. Those who have driven more than 25,000 miles in California could receive as much as $8000.

That amount is based on an estimate that only 50 percent of those eligible will file claims.

If 100 percent of the eligible drivers in California file claims, the amount that each driver receives would be $1950. In Massachusetts, the average amount received if 100 percent of eligible drivers file claims would be $979.

The average payout for drivers who drove less than 25,000 miles is between $24 and $1137.

The settlement still allows Uber to set fees and to determine how much of the fare it keeps. Currently, Uber keeps an upfront booking fee and then 20 percent of the remaining fare.

As a result of the settlement, drivers will now be able to post information in their vehicle explaining that tips are not included in the fare and that tips would be appreciated.

The agreement also  makes it somewhat more difficult for Uber to fire (or deactivate as Uber calls it) drivers working in California or Massachusetts.

Uber must now show sufficient cause for firing a driver and provide a warning that gives the driver an opportunity to correct problems identified by the company.

It establishes a panel composed of highly rated drivers who will hear appeals by drivers contesting their firing. Drivers not satisfied with the panel’s decision may appeal to an arbitrator paid by Uber.

Uber will no longer be able to fire drivers for low acceptance rates. In the past, if drivers accepted less than 80 percent of ride requests, they received emails from Uber threatening them with dismissal.

The settlement also requires Uber to meet quarterly with representatives of a drivers association.

The drivers association and Uber will discuss issues of concern among drivers.

The Teamsters in California have already stated that they will try to help Uber drivers form their association.

“After receiving overwhelming outreach from Uber drivers, representatives of Teamsters Joint Council 7 have announced plans to form an association for workers in California’s rideshare industry,” reads a statement issued by the Teamsters after the

“We welcome any Uber drivers seeking to improve their working conditions,” said Rome Aloise, Teamsters International Vice President and President of Teamsters Joint Council 7. “By coming together, the Teamsters will help these drivers have a stronger voice and improve standards for rideshare drivers in California.”

The Teamsters have already helped organize an association of Uber drivers in Seattle.

Despite the concessions that Uber made in the settlement, Uber seems quite happy with the outcome.

In a public statement, Uber said that it “was pleased (with) this settlement” because it leaves intact for now the drivers’ status as independent contractors.

Michael Hiltzik, writing for the Los Angeles Times, observes that Uber has other reasons to be happy.

“Had litigation continued, it might have put the company’s entire business model on trial, exposing the degree to which the economic benefits of the so-called ‘gig economy’ flow heavily, even exclusively toward investors and executives at the expense of those providing the core services.”


Uber drivers in NYC petition for a union election

Uber drivers at New York City’s LaGuardia Airport have filed a petition with the National Labor Relations Board (NLRB) seeking a union representation election.

The workers want to be represented by the International Brotherhood of Electrical Workers (IBEW) Local 1430.

The petition for union representation came after Uber imposed a 15 percent fare cut.

Local 1430 organizers have been talking to some Uber drivers at LaGuardia for the past year about organizing a union, but the fare cut ignited outrage among drivers that set the union representation process in motion.

Jordan El-Hag, Local 1430 business manager, said that drivers wanted a voice on the job.

“Uber’s imposing changes unilaterally and (the drivers) want to have a say, said El-Hag to the International Business Times. “It’s about having a say over their livelihood.”

Uber recently announced fare cuts in 100 cities in the US and Canada. The cuts range from 15 percent to 45 percent.

The cuts caused some Uber drivers to walk off the job in New York and San Francisco.

In New York, 600 Uber drivers demonstrated at Uber’s New York City headquarters to protest the fare cuts.

Tsering Serpa, an Uber driver, told the New York Times that because of the fare cut, he will have to work 10 to 14 hours a day. Serpa told the Times that before the fare cut went into effect, he was working eight hours a day six days a week.

“New York City just keeps getting more and more expensive,” said Sherpa to the Times. “How are we supposed to survive on less money?”

The New York demonstration was organized by the New York City Taxi Workers Alliance.

There are about 30,000 Uber drivers in New York City, but rather than trying to organize all of them at once, Local 1430 decided to organize a small group of drivers that share a community of interests.

Uber drivers at La Guardia learned that in order to pick up fares at the airport, they needed to stay in close proximity to it. As a result, they began gathering at the same airport parking lot waiting for dispatches from Uber.

The parking lot became a de facto work site, said El-Hag to the International Business Times.

Even though Uber has not responded publicly to the petition, it is certain that the company will challenge it before the NLRB.

As it has in the past, Uber will likely argue that its drivers are independent contractors and therefore have no rights to form unions and bargain collectively.

But a recent ruling by an NLRB regional office in Arizona could have some impact on how the NLRB rules.

NLRB Region 28 Director Cornele Overstreet recently rejected arguments by Tucson Yellow Cab that its drivers are independent contractors.

Overstreet wrote that independent contractors must have “actual entrepreneurial opportunity for loss or gain,” but Yellow Cab sets fare rates and controls other facets of the job that limit entrepreneurial opportunity.

Consequently, Overstreet ruled that a union election take place at Yellow Cab.

Local 1430 is hoping for the same result at LaGuardia.

The fact that an IBEW local ended up helping LaGuardia Uber drivers organize is an interesting story in itself.

At one time, Local 1430 represented workers in New York City’s electrical manufacturing industry, but most of those jobs have been moved out of the city.

Instead of fading away, Local 1430 decided to reinvent itself. It became a self-described organizing local.

“Seventy percent of our time and resources are spent organizing,” said El-Hag to The Electrical Worker. “The rest of the time is devoted to servicing existing units. This is the reverse of many locals.”

“All of our business agents act as organizers,” continued El-Hag. “Our goal is for each business agent to organize 100 new members each year. We conduct staff meetings each week to review targets. Our guys are on the street every day making contact with workers inside and outside industries we are focusing on. Even as they service locals, agents stay busy in the mornings, afternoons and evenings visiting workplaces to collect organizing contacts and information.”

Local 1430 represents workers at about 40 companies throughout New York City and surrounding  areas.

The organizing culture at Local 1430 led its organizers to make contact with some Uber drivers at LaGuardia.

When the fare cuts set off a spontaneous demonstration by Uber drivers, Local 1430 organizers began collecting signatures on union authorization cards, the first step toward getting the NLRB to hold a union election.

Three days later, Local 1430 petitioned the NLRB for an election.

A lot will be riding on the final outcome of this organizing drive. If successful, it could change the way that Uber and other sharing economy businesses treat their workers.