One Part of New Uber Deal: Drivers Can Encourage Tips

But they'll remain independent contractors
By Newser Editors and Wire Services
Posted Apr 22, 2016 7:35 AM CDT
One Part of New Uber Deal: Drivers Can Encourage Tips
In this July 15, 2015, file photo, an Uber driver sits in his car parked near the San Francisco International Airport parking area in San Francisco.   (Jeff Chiu)

It will cost Uber up to $100 million and some significant policy concessions, but the ride-hailing company is forging forward with its thriving business model by keeping its drivers independent contractors—for now, the AP reports. Uber settled major class-action lawsuits in California and Massachusetts that sought employee status and the rights that come with it for drivers, both sides announced Thursday night. Under the deal, Uber will pay $84 million to the plaintiffs and another $16 million if the company goes public and meets certain goals. The deal settles the two largest lawsuits Uber faced, thought it still faces similar suits in several other states, including Arizona and Florida. In a concession touted by the plaintiffs, Uber will allow drivers to put signs in their cars saying "tips are not included" in the price of a ride and would be appreciated.

"By Uber making clear to riders that tips are not included, we believe that many riders will now tip their Uber drivers because riders have been under the impression from Uber’s prior communications that tips are included in the fares," says an attorney for the plaintiffs, per Re/code. Uber also agreed to improve its systems for communicating with drivers about their ratings and why they're terminated, to allow arbitration in disputes with drivers, and to help start drivers associations in both states. Uber CEO Travis Kalanick said in a blog post that "we haven't always done a good job working with drivers," especially on the issues of deactivation and appeal. Classifying its workers as employees could have increased Uber's operating expenses significantly and would go against its business model and identity. (More Uber stories.)

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