Uber will pay $100 million to settle the biggest legal threat to its business, but are Drivers or Uber the real winner?????

It is crying shame to have settled this case. I am sure fighting Uber is a hard and arduous undertaking, but once you take case, a lawyer is supposed to do what is in the client's best interest and not their own....and certainly not where the opponent (Uber) makes out better than all of the parties. It is as if this settlement was a clear victory for Uber.

As we know, Uber has spent the last two and a half years embroiled in a major legal battle over its business model. The company considers its drivers to be independent contractors, but many of those drivers believe they were treated more like employees. Paying up to $100 million to settle class action lawsuits in California and Massachusetts removes the biggest threat to Uber's Business model. Drivers in those states will remain independent contractors rather than becoming employees. So who wins in all of this????? Certainly not the drivers. The small amount of money they will each receive will perhaps reimburse them for some of their past costs for gas and car maintenance, but Uber is not going to be paying any of these items to drivers in the future. The drivers get a bit more protection by having less stringent rules before Uber can deactivate a driver and drivers are allowed to ask for tips from passengers. BIG DEAL......This is a settlement that is fair to drivers? NO WAY. NOT IN MY BOOK. 

Uber get to keep its business prized model and gets to claim vindication by continuing business as usual. 100 Million to them is peanuts. So we know that Uber benefits the most, but who also benefits....the lawyers for the drivers. Class action cases of this nature are supposed to be about vindicating the rights of the drivers, but for the plaintiffs attorneys it has proven to be clearly about a big payday and mega buck. Yes, they worked extremely hard over the past 2.5 years, but in the end they will get about $25-$30 Million dollars in legal fees from this case. This is a huge incentive for them to settle and the impetus to convenience their clients (the drivers) that the settlement will give them more rights and will vindicate their interests.

I have the utmost respect for the plaintiffs’ attorneys as they took a case and financed it all the way, but I believe they had a great case and would have won. I have been litigating cases involving the issue of employer-employee relationship in almost every forum in New York for the past 20 years and this is one of the most clear cut cases of employer employee relationship I have ever seen. So why settle, especially before the plaintiffs’ attorney even had the chance to make a motion for summary judgment asking the court to declare Uber's drivers to be employees as a matter of law? The answer is that the plaintiffs’ attorneys worked hard, paid money from their own pockets to litigate the case and they wanted to get paid.....and now they will....BUT the real issue of whether Uber's drivers are employees or independent contractors will remain unsettled. 

In the interim, Uber, which doesn't really make money at all, will continue to save as much as 30% or so on labor costs, because independent contractors aren’t entitled to the same safety nets as traditional employees—i.e., benefits such as health insurance and minimum wage protection. They’re also responsible for paying their own business expenses. For Uber drivers, these include gas and car maintenance, which really add up.

What a shame for the drivers, because they really don't get anything here.....and what a shame for the legal profession because now it is just another case where the lawyers settle because money has that kind of effect on people. This degrades the legal profession....and kind of makes me ashamed to be a part of it. A lawyer is supposed to zealously represent the interests of their client (not their own interests). I apologize in advance too the attorneys for the drivers, but this case has turned into just another case to make money. It turns out that it was not about vindicating the rights of drivers. Each driver really did not have much to lose by continuing to litigate the case, but the plaintiffs attorneys had about $25-$30 Million dollars in legal fees to lose. This appears to be simply too much for them to risk. The drivers didn't  have much to risk by continuing. In the end, for the drivers who drove the most, around 10,000 drivers, they will receive around $8,000. For the rest, the more than 122,000 drivers who have driven less than 750 miles, they should expect an average of $24. This is a pathetic settlement that the drivers should reject as it is their case and they should demand more.


Sometimes you have to take a risk and sometimes that risk means taking a case all the way and get a decision. Yes, it would have been a big gamble for the plaintiffs attorneys and they did a great job thus far, but I felt so strongly about this case that if asked, I would have worked with them for free. After 20 years of practicing law, I still believe in justice...and in this case, justice was not served. Uber continues to operate with impunity, their business model survives and the drivers go on as usual, getting treated like cattle, when in fact they are as close to an employee of Uber as any case could possibly expose. Again, Uber wins, the lawyers win and the driver, who are the represented parties, get nothing in the long run. 

The settlement represents a huge win for Uber. If the lawsuit had gone to trial, and a jury decided that drivers indeed deserved to be full employees, then Uber could have suddenly found itself responsible for all sorts of extra costs, from Social Security payments to minimum wage requirements. Instead, drivers will stay "independent", and Uber keeps its costs low. Don't be surprised if you don't see any Uber drivers celebrating in the streets as a result of this settlement. Many were hoping for a much different outcome.

I believe it is obvious that the plaintiffs/drivers who wanted to be employees are going to be disappointed and they should be. Although the lawsuit was settled, for the drivers, Uber really won this case.

But drivers could end up eventually coming out on top, depending on whether the settlement is approved by US District Court Judge Edward Chen, and everything he has said up until this point seems to suggest that he was looking forward to a jury trial. The plaintiffs in Uber's case were seeking $3.4 billion, a fairly ridiculous sum but one they thought they were owed. Judge Chen could decide that $100 million isn't enough compensation, or that the reforms Uber is promising more transparency, an ability for drivers to solicit tips and challenge deactivations through arbitration, recognition from Uber of quasi-union "driver associations" don't even scratch the surface.

Another potential poise result from this settlement is that without any jurisprudence on the most critical issue of employer-employee relationship, there is nothing preventing others from championing the cause in the future. The case would be settled and not decided. Until a court decides whether Uber drivers are employees or independent contractors, the debate will not end. I guess a new set of plaintiffs in other states will have to hope for a lawyer that is willing to take the risk of taking this type of case to trial and consider more than their own self interests in being compensated for their efforts rather than the cause they were supposed to be seeking, which is justice.