Uber has agreed to settle a $7.5 million background check lawsuit brought by it’s drivers. The settlement played out in a San Francisco court room. Lawyers are in the process of a formal settlement draft to be approved by a Federal Court judge. Uber, while no stranger to litigation and lawsuits, appears averse to contesting and more to settling outside the court room. The substance of the background check lawsuit involved drivers that were dismissed subject to an unauthorized background check. April also saw Uber settle further lawsuits again initiated by Uber’s drivers. This was an attempt to have themselves fall under the umbrella of employees as opposed to independent contractors. Drivers remained as contractors post settlement. However Uber paid out to 385,000 drivers around $100 million. Under employee status drivers would have been entitled to benefits along with expenses such as tolls and gas.
Prior to this Uber agreed settlement for two lawsuits in February. The lawsuit settlement was for $28.5 million. The lawsuits had taken issue with the safe ride fee. The lawsuits contended that Uber misled it’s clients. That the standards for hiring fell short of the stringent criteria put forward by the company. The settlement equated to around $1 per passenger. However it also forbids Uber from carrying on certain marketing around it’s services. The statements now redundant are “gold standards in safety” and “safest ride on the road”. According to various reports Uber is throwing money at China at between $1 and $2 billion annually. However a recent statement claims the U.S returns a profit for Uber. The cab hailing company had recently leveraged $2 billion in loan debt. Along with a further $3.5 billion from Saudi Arabia.
Are lawsuits solely for the benefit of lawyers. After facing criticism the lead lawyer in the $100 million lawsuit has reduced her fee by $10 million. Critics say while the settlement has little impact on drivers the plaintiff’s law firm certainly reaps massive rewards. The law firm had a 25% contingency fee but which came in for heavy criticism. Drivers were to receive $8,000 but will now benefit further by the part $20 million lawyer fee.