- ERIC PIERMONT/AFP/Getty Images
Last month Uber agreed to pay drivers in Massachusetts and California $100 million to settle a class action suit that accused the company of misclassifying employees as independent contractors.
At the the Milken Conference in Los Angeles, a panel including the CEOs TaskRabbit, Marquis Jet and AirBnB, and Princeton economist Alan Kreuger talked about it, and no one was really satisfied.
“The only winners here are the lawyers,” said Kreuger.
“The lawyers representing them in the class action suit made more than the workers.”
Indeed, about quarter of the settlement ($21 million) will go to lawyers. Worse yet, according to the panel, none of the really deep-seated problems workers like Uber drivers face were actually addressed.
Here’s what they did get, from Alan Hyde at The Conversation:
Under the terms of the settlement, which you may read here, Uber will pay US$84 million to be distributed among a class of 385,000 drivers (and $16 million more if the company goes public). In return, the drivers will not pursue their claim to be employees.
Uber will also make it clear that tips are not included in the price users pay and will revise its procedures for delisting drivers to give longer notice and greater transparency, including adding an appeals process. And the company will assist the creation of drivers’ councils and meet with them quarterly.
Again, Uber drivers’ issues with not having benefits like health insurance and not being covered under the Civil Rights Act, were not addressed here and some drivers got only a few hundred dollars out of the settlement.
That’s why Kreuger said that he’s working to create a new category of workers, “independent workers.” This status would bring workers under the protection of Title 7 of the Civil Rights Act and allow employers to apply tax withholding.
It would not, on the other hand, require employers to pay overtime, since employees can set their own hours.
Intermediaries sometimes do want to provide benefits, Kreuger explained, but they’re afraid that it would mean their workers would be classified as employees.
TaskRabbit CEO Stacey Brown-Philpot agreed with Kreuger.
“No one’s putting legistlation forward to address this,” she said adding later, “I am for more activist work around regulation because of the gray areas where we are.”
So who’s going to Washington to fix this?