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takyon [soylentnews.org] writes:

Uber is settling class action lawsuits with drivers in two states [npr.org], who will remain as independent contractors rather than employees:

Uber drivers will stay independent contractors, not employees, in California and Massachusetts, just as the ride-booking company had maintained they were. Uber is settling class action lawsuits by drivers in the two states for a maximum of $100 million.

In a statement, the company says [uber.com] it will pay the plaintiffs $84 million, plus another $16 million if Uber goes public and within a year increases in value by one and a half times over its worth in December. The deal allows Uber to keep labor costs low because it doesn't have to pay independent workers the same kind of wages, expenses and benefits as employees.

In a claim last year brought by an Uber driver, the California Labor Commissioner ruled [npr.org] the driver was an employee. Although the commissioner's ruling was specific to the claim and not precedent-setting, it gave plaintiffs some ammunition and Uber more incentive to negotiate. Still, Uber has been able to keep this aspect of its business model in place.

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