On The Uber Settlement & What’s Next For Drivers

There are two ways to think about whether a settlement is a good deal from the perspective of the plaintiffs.  One is whether, in light of all the facts and law relevant to the particular litigation, plaintiffs’ attorneys got as much for their clients as they could.  No one, other than those intimately familiar with the case, can assess that question perfectly.  The second is whether the settlement amounts to progress for the plaintiffs from a broader, less litigation-specific perspective.  Here, outside observers can have more to say.

It will take time to fully digest the Uber settlement, announced today, but a few things seem clear.  First, Uber prevailed on what is, by far, the most important issue.  The primary question in this case, and the one with the greatest practical relevance, is whether whether Uber drivers can continue to be misclassified as independent contractors or will be treated as employees.  As Uber proudly announced today, “Drivers will remain independent contractors, not employees.”  Uber drivers did secure some genuine benefits.  There are financial payments to the drivers (up to $8000 for those that drove the most; less for those who drive less), and drivers can now inform passengers that tips can be accepted.  There are also some improvements to how and when drivers can be deactivated.  And Uber has also agreed to help establish a drivers “association.”

These are real gains even though, in my view, they pale in comparison to what the settlement allows Uber to do.  There are also some important questions about the gains.  What will it mean, in practice, that Uber can temporarily log drivers out of the app without the ability to accept new requests, but not deactivate them?  Given how baked into the Uber experience the “no tipping” rule is, can we expect postings – informing passengers they can tip – to have much effect?  And labor lawyers will wonder whether a drivers’ association that has any teeth can be established consistent with § 8(a)(2) or antitrust law.  It may well be doable, but will require some real work.

Plaintiffs’ lawyers, and the drivers who fought with them, deserve credit for moving the ball forward.  Looking beyond this litigation, we might turn our attention to the NLRB.  Recently, the Board’s general counsel announced his position that employee misclassifaction may be an unfair labor practice.  We’ll keep tabs as the charges start to flow.