Uber is being sued by so many people right now that it can be hard to keep track. Last year, 50 lawsuits were filed against Silicon Valley's favorite start-up in U.S. federal court alone—and since then, still more suits have been filed, while others have settled.
Some of these suits could spell big trouble for Uber. Many of the cases challenge Uber’s basic business model, arguing that that Uber misclassifies drivers as independent contractors, rather than employees. Right now, though, Uber seems in a rush to quash its legal troubles, having made settlement offers on at least four cases already this year, totaling up to $146 million. This could be a sign that Uber has an IPO on its mind: the company definitely won't want to be dealing with a bunch of potentially business-altering lawsuits when it makes its public debut.
Because it can be a challenge to keep track of all of the different people who have a beef with Uber, here is a handy guide to everything going on right now with all of Uber's major suits.
Back in 2013, attorney Shannon Liss-Riordan hit Uber with a big blow when she sued the company on behalf of about 385,000 current and former Uber drivers in California and Massachusetts, arguing that Uber was obligated to give them the kind of pay and benefits usually afforded to employees. The case was finally slated to go to trial this month, but in April Liss-Riordan negotiated an $84 million settlement, to be paid out to drivers based on how many miles they had driven (it would go up to $100 million if the company goes public).
The settlement, though, was controversial, attracting criticism from both drivers and the San Francisco judge overseeing the case that the proposed deal doesn’t do enough for drivers. This week, Liss-Riordan offered to cut her own $21 million attorney's fee by almost half in order to help the settlement go through. For now, the case waits in limbo for the judge to either approve or deny the settlement. The judge hinted at an earlier settlement hearing that he is likely to reject the deal, citing concerns that it could put the kibosh on other litigation against Uber and make it harder for drivers to sue the company in the future.
For Uber, employment classification lawsuits have become a game of legal Whack-A-Mole: as soon as it looks like one may be taken care of, another one pops up. Earlier this month, a group representing 5,000 Uber drivers in New York City filed a lawsuit arguing that drivers were misclassified as independent contractors by the company. In Boston last week, yet another driver filed a similar suit. At least eight other employment classification cases are pending in states including Indiana and Texas. Four others have been sent to arbitration, where drivers can bring individual claims rather than seek a settlement as a class.
In 2014, a Boston driver filed a class-action suit against Uber in San Francisco, arguing that the company had conducted illegal background checks and then terminated drivers from its platform after obtaining consumer background reports without authorization. Wednesday, on the eve of Uber's appeal of a 2015 ruling in the case that found the company's arbitration agreements with drivers were not enforceable, Uber agreed to shell out $7.5 million to settle the suit. That settlement awaits approval from the same San Francisco judge as the employment class action litigation. (Interestingly, Liss-Riordan had asked the judge to stay the case, fearing that it could interfere with her own class-action case's settlement.)
That Boston Uber driver was not the only one to take issue with Uber's background check practices. In April, the company coughed up $10 million to settle allegations by California prosecutors that the company misled riders about the quality of its driver background checks, with the stipulation that it pay an additional $15 million if it fails to comply with settlement terms aimed at improving safety within two years. And in February it agreed to pay $28.5 million to settle similar litigation brought by customers. After that suit, Uber renamed its "Safe Rides Fee" to a "Booking Fee" in the app.
After Uber and Lyft pulled out of Austin, Texas on the heels of a failure to overturn city rules requiring drivers with ride-hailing services to be finger-printed, last week a pair of former drivers brought a lawsuit alleging that the companies violated federal law by failing to properly notify drivers of the shutdown. The suit, filed in San Francisco, could force both companies to pay out wages and benefits drivers would have earned during the legally required 60-day notice period. But more importantly, it is yet another challenge to Uber's assertion that its drivers are independent contractors, arguing that drivers are entitled to the benefits and job protections of employees.