Not surprising to anyone, ride-hailing company Uber has been hit with two more lawsuits from drivers, despite recently submitting a proposal for a $100 million settlement in two previous cases.
The new lawsuits, filed in Florida and Illinois, claim that Uber has violated the the Fair Labor Standards Act, and seek to recover unpaid overtime wages and other expenses, according to the Los Angeles Times. The Illinois lawsuit also seeks to recover tips it says Uber’s misleading messages to riders has cost drivers.
These are the first lawsuits against the company to emerge following the company’s big proposal that could have it paying a settlement up to $100 million, a big price tag, but also not that high for a company that’s raised more than $8 billion in funding. But it’s also a small price for Uber to pay to retain its drivers’ status as contractors (for now), which is fundamental to the company’s business model.
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“Nearly 90 percent of drivers say the main reason they use Uber is because they love being their own boss,” a company spokesman told Coins2Day when asked about the new lawsuits. “As employees, drivers would have set shifts, earn a fixed hourly wage, and lose the ability to drive with other ridesharing apps—as well as the personal flexibility they most value.”
As part of the settlement proposal, Uber also said it will allow drivers to form local associations and adjust its policies around deactivating drivers. It’s also clarifying the language it uses when it comes to gratuities, to better communicate to riders that they’re allowed to tip drivers if they want to (but not through the app).
The settlement proposal only covers drivers in California and Massachusetts—the lawsuits’ home states—so it was obvious that it wasn’t going to be the end of Uber’s legal battles over this issue. “Uber has placed in motion, with its proposed $100-million settlement, a rush to the courthouse by other drivers and class-action lawyers for their piece of Uber,” employment attorney Richard Reibstein told the Times.
A $12.25 million settlement in a similar lawsuit against rival Lyft was recently rejected by a California judge, who argued it “shortchanged” drivers.