he litigation attacked the ride-sharing company's business model of treating its drivers as contractors to avoid the costs of paying a minimum wage, overtime, sick leave and health insurance.
Uber Technologies Inc. will pay $20 million to settle California lawsuits challenging the company's classification of drivers as independent contractors, and not employees owed the benefits of traditional employment.
Resolution of the long-standing fight over benefits and pay comes as Uber is preparing for its initial public offering later this year. The litigation attacked the ride-sharing company's business model of treating its drivers as contractors to avoid the costs of paying a minimum wage, overtime, sick leave and health insurance.
The cases turned on whether drivers were essentially forced by their contracts to resolve any conflicts one-on-one, behind the closed doors of private arbitration and forbidden to join forces in class-action lawsuits. Drivers argued Uber made it onerous for them to opt-out of the arbitration provisions.
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