Uber is perhaps the largest and most notable company today that uses independent contractors. For their business model to work, they must employ massive amounts of drivers, but not offer them any form of benefits to keep costs low. However, many of its 450,000 drivers have taken to working for Uber full time. While being an Uber driver does pay relatively well, maintaining a standard of living without receiving key employment benefits such as overtime pay can be a difficult task.
Recently, Uber settled a class action case involving drivers from California and Massachusetts over the way its drivers are classified as independent contractors. The plaintiffs argued that all Uber drivers are employees, and that they are owed employee benefits. The case ended with Uber settling for up to $100 million, $84 million of which are guaranteed to driver compensation now and another 16 million if Uber’s company valuation rises. By settling the case outside of court, Uber can continue to classify its drivers as independent drivers and keep working with its existing business platform.
Many Silicon Valley tech companies showed much interest in the results of the case because Uber is one of the first companies to use independent contractors on such a massive scale. To many people’s disappointment this specific case will never see trial. We have yet to see any new landmark legislation concerning using independent contractors on a large scale and it will undoubtedly be interesting to see the direction Uber heads if someday has to reclassify drivers as employees. While Uber is still able to classify their drivers as independent contractors, it was at great cost.
Many people across the country in other positions are wrongly classified workers and lose out on employee benefits because of it. If you think that you may be misclassified as an independent contractor, the wage claim attorneys at Williams Kherkher may be able to help you recover overtime pay. Call us today at (888) 262-9002 for more information.