Uber allows drivers to participate and earn cash as a part time job, but how much do they really share with the driver.
I’ve been in Southern California this week and using Uber a lot, so I decided to ask my drivers what they thought of the proposed $100 million settlement their lawyer had negotiated over their complaints against the online car service.
First response: My lawyer? My claims? None of the drivers I rode with knew much about the lawsuit other than the fact Uber was being sued. All were opposed to the central claim in the suit, that they be classified as employees instead of independent contractors. And all were surprised to learn that the lawyer representing them, Boston attorney Shannon Liss-Riordan, could negotiate an agreement on their behalf, and potentially collect tens of millions of dollars in fees, with only four Uber drivers as named plaintiffs.
“I guess that’s how lawsuits work,” said one driver, a semiretired man who said he uses Uber to pick up extra cash and “get out of the house. ” When I told him his lawyer was trying to change his classification from independent contractor to employee, he winced. “I like being a 1099 employee,” he said, referring to the federal tax form independent contractors receive instead of a W-2. “I don’t ever want to work for a company again.”
The settlement covering several hundred thousand drivers in California and Massachusetts works out to an average of some $200 per driver but includes a kicker that indicates its true value to Uber: The payout reaches $100 million only if Uber’s market value expands by 50%, or $30 billion. That explains why Uber’s throwing so much money on the table, and given Liss-Riordan’s assumed derivative interest via a percentage fee, it might represent a classic example of a Silicon Valley deal no one can refuse.
Due to the mysterious workings of the class action mechanism, Liss-Riordan can claim her payday if a judge decides she represents all those drivers, without actually going through the hard work of recruiting them as clients or determining what they really want.
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