Uber has agreed to pay up to $100 million and make several policy concessions to settle a pair of major class-action lawsuits in two states which will keep its drivers independent contractors instead of employees, both sides declared Thursday night.
The resolution is an important step toward the ride-hailing firm keeping its profitable business model that has been threatened as motorists have sought more bargaining rights and a more protected standing.
Under the deal, Uber will pay $84 million to the plaintiffs in California and Massachusetts and another $16 million if the company meets with specific aims and goes public.
In a concession touted by the plaintiffs, Uber will enable drivers to put signs in their own cars saying “hints will not be included” in the cost of a ride and would be valued. Lyft, a rival ride-hailing service, allows for passengers to add a tip for the driver on the app, Uber doesn’t.
San Francisco-based Uber also consented to improve its systems for communicating with motorists about their ratings and why they are terminated, to permit arbitration in disputes with motorists, and to help begin drivers’ associations in both states.