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Uber's arbitration of IC misclassification claims in US could total $170 million

May 09, 2019

Human cloud, ride-sharing firm Uber Technologies Inc. updated investors on independent contractor misclassification claims against the company — including up to $170 million for individual drivers claiming misclassification — as well as other challenges in a filing today with the US Securities and Exchange Commission. Uber’s filing comes one day before its expected initial public offering, and the day after drivers in several countries worked to organize a strike over pay.

Uber noted it set aside $132 million to pay independent misclassification claims brought by drivers in arbitration hearings. The filing said that as of May 8, 60,000 drivers in the US have or may file for arbitration claiming they were misclassified as independent contractors. These drivers are not included in court hearings because they agreed to have their claims against the company heard individually in arbitration outside of court. Uber wrote the approximate range of settlements, along with attorney’s fees; this amount is expected to be $146 million to $170 million.

The arbitration claims are in addition the $20 million Uber agreed to pay to settle a lawsuit by drivers in California and Massachusetts who claimed they were misclassified as independent contractors. A final approval hearing in US court on this settlement is scheduled for July.

Uber’s filing also cited possible risks over its license to operate in London.

Transport for London decided in September 2017 not to renew the company’s license to operate in the city. Uber appealed that decision in June 2018, and was granted a license to operate in London on a 15-month term instead of the usual five-year term. However, the company noted if its license is not renewed, it would again appeal. Still, the company said an adverse decision in London could affect its operations there and possibly elsewhere.

Uber also noted that this month a class action lawsuit was filed against the company in the Supreme Court of Victoria, Australia. The lawsuit was filed by taxi, hire-car and limousine firms claiming that Uber was operating unlawfully between April 2014 and August 2017.

The company also said that in some countries, clients can pay in cash, and that has raised security concerns for drivers. “In certain jurisdictions such as Brazil, serious safety incidents resulting in robberies and violent, fatal attacks on drivers while using our platform have been reported.”