Uber, gearing up to launch an initial public offering (IPO) in the first quarter of 2019, is offering to settle with drivers who have been fighting the ride-hailing company via individual arbitration.
According to a report in TechCrunch, citing law firm Lichten & Liss-Riordan, Uber has as part of the settlement tentatively offered to pay 11 cents for each mile Uber drivers drove. Drivers have been going after Uber individually after a September ruling that they could launch a class action lawsuit against Uber. Uber declined to comment to TechCrunch, noted the report. The lawsuits over driver classification goes back a few years and involves nine states and 160,000 drivers. The drivers want to be classified as employees instead of independent contractors so they can get compensated for expenses including gas and maintenance on their vehicles. Drivers are also focusing on Uber’s move to prevent drivers from keeping or accepting tips from passengers. In June of 2017, Uber did introduce a tips app, which TechCrunch reported resulted in drivers earning an extra $600 million in one year’s time.
With the settlement, drivers who accept it must release all claims lodged against Uber related to misclassification of employees. TechCrunch noted the settlement is tentative depending on how many drivers sign up for the agreement as well as other factors, reported TechCrunch, noting payment could take six months to reach drivers. The report noted that 11 cents per mile is about one-third of what the driver could have received if he or she pursued arbitration instead of seeking a settlement.
The move on the part of Uber to potentially settle with the drivers comes as reports are surfacing that the IPO is about to happen. Earlier this month The Financial Times, citing people familiar with the matter, reported Uber filed paperwork with the SEC, which means an IPO can happen soon with the first quarter the most likely time frame. Uber is expected to be among the biggest IPOs for 2019, already garnering a multibillion-dollar valuation. By settling with drivers it removes one bit of uncertainty for investors.