SAN FRANCISCO — Uber has settled a pair of major class-action lawsuits in California and Massachusetts that will keep its drivers independent contractors instead of employees, the company announced Thursday night.
The settlement is a major step toward the ride-hailing company keeping its current thriving business model that has been threatened as drivers have sought a more secure status and more bargaining rights.
Under the deal, Uber will pay $84 million to the plaintiffs in the two states and another $16 million if the company goes public and meets certain goals.
Classifying its workers as employees could’ve raised Uber’s operating expenses significantly and would go against its business model and identity.
Federal law does not extend collective bargaining rights to independent contractors.
The settlement, which involved 385,000 drivers in the two cases, was filed in a U.S. District Court in San Francisco. A federal judge still must sign off on the deal.
Attorneys for the plaintiffs could not immediately be reached for comment.
