However, the judge denied the settlement because of money that will mostly go to the state, not the drivers.
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Some drivers had objected to terms of the settlement valued at up to $100 million, which would have affected roughly 385,000 current and former drivers in California and MA. The settlement would have paid as much as $8,000 to some drivers, but the majority would receive $24 or less, according to earlier court documents.
US District Court Judge Edward Chen for the Northern District of California ruled that Uber’s settlement offer, in which it would have paid $100 million to roughly 385,000 drivers in California and MA, was unfair, inadequate and unreasonable. Its proposed settlement of million was approved in June.
He did not rule the same for the PAGA amount.
Judge Edward Chen denied the plaintiff’s motion to settle the case, saying it was neither fair nor accurate, citing the tipping policy as one change not almost as valuable as the settlement had suggested.
In the settlement, Uber had promised to give drivers more information about their quality rating and share additional information about the conditions under which it deactivates drivers.
Chen cited a prior ruling from the California Labor Commission that said that Uber had to treat a driver as a full-time employee.
Uber spokesman Matt Kallman said, “the settlement, mutually agreed by both sides, was fair and reasonable”. For Uber, a settlement would ward off a serious legal threat to its business model that has helped persuade investors to value the company at $68 billion. He said that the company is disappointed in the ruling and is evaluating its options.
An attorney for drivers could not immediately be reached. While it provides payouts of several thousands dollars to those who drove full-time for Uber, it does not force the company to re-classify its drivers as employees.
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Keeping drivers as contractors, not eligible for benefits or other protections for full-time workers, has been instrumental in Uber’s astronomical growth and business model.
