Interesting Settlement Proposal by Uber

Have you ever thought about what it means to be an interesting employee of a company? When you are considered a permanent employee, whether in a part-time or full-time capacity you have a responsibility to that company and the company does to you as well. You would be required to have a non-compete agreement which would prevent you from working in the same industry for another company and the company would be required to offer you at least minimal benefits. In some cases this is not the preferred arrangement and what you need is to be an independent contractor that has the company as a client rather than being an employee.

Uber is the most used ride sharing service in the country at the moment and is in the midst of a lawsuit with 385,000 of its 450,000 drivers. These drivers put together a lawsuit to be considered employees of the company and begin to enjoy minimal employee benefits such as minimum wage, overtime pay and reimbursement for driving expenses. The drivers that banded together are those from California and Massachusetts with the California drivers being the largest part of this group. If this lawsuit were to go to court there is no certain outcome as the lawsuit was filed in San Francisco which is an area that uses Uber heavily.

Uber has chosen instead to settle with this group for a sum of $84 million initially and more if the company is to file an IPO and the value grows by 150 percent within the first year as compared to the value of the company in December of 2015. The money each driver will receive will depend upon the miles that driver had logged with those who have logged over 25,000 miles receiving an average of $8,000.

Is this a fair settlement from Uber? This does allow the Uber drivers to be able to work for both Uber and Lyft as they desire and to push a button on their phone to clock in an out rather than punching a clock. This keeps the group as independent contractors rather than employees and while this means they won’t receive any benefits from the company they are still free to drive as little or as much as they choose. This makes driving for Uber a great way for a driver to make a little extra money to supplement their income each week or to create a full time income from it if they drive enough.

This settlement offer has also brought Uber to the decision to publish a deactivation policy. This policy will make the removal of a driver dependent upon sufficient cause rather than at will. This gives the drivers the ability to feel they are going to be able to continue to drive for the company as long as they do the job well. There will even be an association for the drivers to air grievances like other companies and Uber will meet with this association once a quarter to discuss needs and concerns. Overall, it seems the Uber drivers came out on top in this settlement which allows them to maintain their freedom and still earn a living with Uber.

05.29.16 - Uber

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