Drivers who worked for ride-hailing service Uber [UBER.UL] in California
and Massachusetts over the past seven years would have been entitled to an
estimated $730 million in expense reimbursements had they been employees rather
than contractors, according to court documents made public on Monday.
Uber and
smaller rival Lyft are attempting to settle lawsuits by drivers who contend
they should be classified as employees and therefore entitled to reimbursement
for expenses, including gasoline and vehicle maintenance. Drivers currently pay
those costs themselves.
According
to attorneys for Uber drivers, the total potential damages in the case are $852
million, when including a claim to recover tips. The figure is based on rates
for mileage reimbursement set by the U.S. government and on data provided by
Uber Technologies Inc.
The
company, meanwhile, calculates damages at $429 million, mainly due to a lower
mileage rate.
The
figures had been redacted in the original settlement deal proposed last month,
but a San Francisco federal judge ordered them unsealed. The new data reveals
how much of a risk employee classification is for on-demand tech companies like
Uber. The proposed $100 million settlement keeps Uber drivers classified as
contractors, though U.S. regulators are still reviewing the issue.
Uber
drivers in California and Massachusetts were entitled to about $122 million in
tips, the filings show. That means Uber made about $732 million in commissions
in those two states since 2009, based on an assumed 20 percent tip rate - more
than $100 million less than it would have cost to reimburse drivers for
expenses and tips.
An Uber
representative declined to comment.
The judge
must decide whether the $100 million Uber settlement is fair, and the total
potential damages at play will likely bear on his analysis. The deal represents
about 12 percent of the potential $852 million in damages.
Lyft had
agreed to settle its class action for $12.25 million, but a separate federal
judge rejected the deal because it represented only about 9 percent of the
value of drivers' claims.
While the
deal does not elevate drivers to employees, attorneys for drivers have defended
it, saying they faced significant risks had the case gone to trial. They also
say drivers who have worked several months could be entitled to thousands of
dollars each under the settlement.
Beyond the
money, Uber also agreed to new policies including an appeals process for
drivers terminated by Uber.
(Editing by Matthew Lewis)
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