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Uber to pay up to $100M to settle lawsuits, drivers stay freelance

By Amy R. Connolly

SAN FRANCISCO, April 22 (UPI) -- Uber will pay up to $100 million to 385,000 drivers who sought to be classified as employees instead of freelance workers, settling two class-action lawsuits but doing little to change drivers' employment status.

Under the terms of the settlement, Uber is required to give drivers information about how and why they are barred from employment. The company is also required to create "driver associations" to represent workers in California and Massachusetts, the two states where class actions were filed. Drivers will also be allowed to post signs in vehicles saying tips "would be appreciated."

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"Importantly, the case is being settled -- not decided," Shannon Liss-Riordan, the attorney representing the drivers, said.

"This case, however, with this significant payment of money, and attention that has been drawn to this issue, stands as a stern warning to companies who play fast and loose with classifying their work force as independent contractors."

For its part, Uber walks away with a major victory. The company will keep its employees classified as independent contractors, sidestepping benefits such as overtime and health insurance.

The settlement only applies to the two states where the lawsuits were filed. Drivers will be compensated through the settlement based on total hours driven.

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"Drivers value their independence -- the freedom to push a button rather than punch a clock, to use Uber and Lyft simultaneously, to drive most of the week or for just a few hours," said Travis Kalanick, chief executive of Uber. "That's why we are so pleased that this settlement recognizes that drivers should remain as independent contractors, not employees."

The settlement must be approved by the judge overseeing the case. Uber still faces similar litigation in Arizona, Florida and Pennsylvania.

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