In an action to enable the $60 Billion tech giant, to continue to classify its drivers as “independent contractors,” drivers settled their lawsuit a little over a month before it was slated to go to trial.
This settlement allows Uber to dodge a deadly bullet:
“Uber Technologies Inc. has warded off a serious legal threat to its highflying business model with a settlement that may end the debate over whether its drivers should be counted as independent contractors or employees…For a company that has raised more than $10 billion in debt and equity, the payment is a small concession relative to the larger triumph of preserving the high-margin business of connecting passengers to freelance drivers. Losing these cases at trial could have forced the company to reclassify drivers as employees, leading to potentially billions of dollars in additional costs, such as health benefits and auto expenses, and jeopardizing its long-term prospects for profitability.” (http://www.wsj.com/articles/uber-drivers-settle-with-ride-hailing-company-in-labor-dispute-1461292153 (Emphasis added)
Uber is not out of the woods yet since this settlement does not preclude others. If enough legal actions are brought, the Uber financial edifice could very well be brought tumbling down—as it should. The fabricated model is built on a façade that transforms workers into quasi-independent small businesses. In the process, Uber skirts all of the worker protection and small business mandates that cities with progressive leadership nation-wide have enacted to ensure equity and fairness:
“Many firms, including Uber and its rival Lyft, prefer to use independent contractors over employees, in part because they aren’t covered by certain legal and tax liabilities and can cost firms less in pay and benefits. Employees are generally covered by protections such as minimum-wage and antidiscrimination statutes, workers’ compensation and union-organizing rights, while independent contractors have no such protections.” (www.wsj.com/articles/uber-drivers-settle-with-ride-hailing-company-in-labor-dispute-1461292153) (Emphasis added)
As NYETA spokesperson Brad Gerstman points out;
“Uber’s way of doing business is designed to maximize its profits to increase its upcoming Initial Public Offering (IPO). It does so by eroding the hard-won rights of workers, and humiliating the disabled here in NY. NY’s collective values don’t faze them in the least. They are the Jerry McGuire of companies whose motto should forever be: “Show me the money!”
The Uber model threatens the workers and small businesses medallion owners who have joined the taxi industry and respected regulatory guidelines promulgated by NYC political leaders for decades. Those protections, however, have been eroded by the fecklessness of our political class.
NYETA will continue to press NYC elected officials who have seemingly lost their way when it comes to regulating Uber, and ensure the company adheres to all of the regulations that taxi companies must abide by. In doing so, we will be living up to those NY values that Uber and its political puppets continue to mock.
Press Contact Sara Greenberg – 516-880-8170
New Yorkers for Equal Transportation Access