Jon Weinberg is a student at Harvard Law School.
Reuters reports that court documents made public yesterday show Uber drivers covered by the O’Connor class action, namely those who worked for Uber in California and Massachusetts over the past seven years, would be owed an estimated $730 million in expense reimbursements alone if they were found to be employees. Meanwhile, the O’Connor settlement, if approved, would pay drivers $84 million to $100 million while maintaining the classification of drivers as independent contractors. More from Reuters:
The figures had been redacted in the original settlement deal proposed last month, but a San Francisco federal judge ordered them unsealed. The new data reveals how much of a risk employee classification is for on-demand tech companies like Uber. The proposed $100 million settlement keeps Uber drivers classified as contractors, though U.S. regulators are still reviewing the issue.
Uber drivers in California and Massachusetts were entitled to about $122 million in tips, the filings show. That means Uber made about $732 million in commissions in those two states since 2009, based on an assumed 20 percent tip rate – more than $100 million less than it would have cost to reimburse drivers for expenses and tips.
The discrepancy between the value of employee status and the value of the proposed settlement is similar to that in another class action concerning the classification of gig economy workers, Cotter v. Lyft, where a judge rejected the proposed settlement as monetarily inadequate. Notably, the Cotter settlement would have paid drivers approximately 10.3% of the assessed value of employee status; the O’Connor settlement at issue now would pay drivers approximately 7.3% of the assessed value of employee status (assuming Uber eventually paid the higher $100 million settlement value based upon the company’s valuation.) In both cases, the value of employee status is probably worth more than the assessed value of expense reimbursements.
The O‘Connor settlement still has yet to be approved or rejected by Judge Edward Chen of the Northern District of California. OnLabor will continue to monitor developments in the case.
Daily News & Commentary
Start your day with our roundup of the latest labor developments. See all
May 9
Philadelphia City Council unanimously passes the POWER Act; thousands of federal worker layoffs at the Department of Interior expected; the University of Oregon student workers union reach a tentative agreement, ending 10-day strike
May 8
Court upholds DOL farmworker protections; Fifth Circuit rejects Amazon appeal; NJTransit navigates negotiations and potential strike.
May 7
U.S. Department of Labor announces termination of mental health and child care benefits for its employees; SEIU pursues challenge of NLRB's 2020 joint employer rule in the D.C. Circuit; Columbia University lays off 180 researchers
May 6
HHS canceled a scheduled bargaining session with the FDA's largest workers union; members of 1199SEIU voted out longtime union president George Gresham in rare leadership upset.
May 5
Unemployment rates for Black women go up under Trump; NLRB argues Amazon lacks standing to challenge captive audience meeting rule; Teamsters use Wilcox's reinstatement orders to argue against injunction.
May 4
In today’s news and commentary, DOL pauses the 2024 gig worker rule, a coalition of unions, cities, and nonprofits sues to stop DOGE, and the Chicago Teachers Union reaches a remarkable deal. On May 1, the Department of Labor announced it would pause enforcement of the Biden Administration’s independent contractor classification rule. Under the January […]