(credit: Uber)
In April, it looked like a high-profile lawsuit against Uber was going to be resolved after the high-flying startup agreed to pay up to $100 million to settle allegations that its treatment of drivers violated labor laws.
Today, US District Judge Edward Chen said the deal “is not fair, adequate, and reasonable,” and he won’t countenance it. In a 35-page order (PDF) he slammed the deal, which would have required Uber to pay $84 million and up to an additional $16 million contingent on whether Uber’s IPO hit certain price points.
After some complicated back-and-forth about Uber’s arbitration agreements, Chen was overseeing a case with a class of more than 240,000 California drivers and just over 60,000 Massachusetts drivers. In addition to payments ranging from $12 to $1,950, drivers would have certain additional rights like explanations before being deactivated, more information about their star ratings, and an internal process for drivers to complain about payment of certain fares. It would also allow drivers in California and Massachusetts to ask for tips—although Uber made clear it would not add an in-app tipping function, and in fact the company dissuades riders from tipping.
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Source: Ars Technica – Judge throws out Uber class-action deal to pay drivers M