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Uber might pay drivers US$100 million to not be its employees

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Are Uber drivers employees or self-employed?

Increasingly, the firm’s drivers in the United States think they are employees and are entitled to claim expenses and other rights such as a minimum wage, social security and health benefits.

Uber, however, does not agree.

The disagreement has ended up in lawsuits,with Uber handing out $84 million to its drivers in California and Massachusetts to get drivers to work as as independent contractors rather than employees.

The taxi firm will have to hand out another $16m if the company goes public and its valuation increases by one and a half times from its value at December 2015 within one year of its initial public offering.

While drivers might never earn $100 million driving an Uber all their life, it is inaccurate to think the drivers have won the case and a fortune.

The sum that each driver gets will depend on how many miles they have driven and the final number of drivers who are eligible to the payment.

For instance, drivers who had driven fewer than 750 miles could receive as little as $24, USA Today reports.

In an interview with Bloomberg Technology,  Ezra Dubroff, an Uber driver in Los Angeles since November 2013  said the settlement folded on the suit’s central claim—that Uber drivers should be classified as employees, not independent contractors.

In the court of public opinion, the deal is being interpreted as a big win for Uber Dubroff says, “People think this is done with and that Uber is right.”

“Six years ago when Uber first started in San Francisco, it was easy to communicate with the handful of drivers using the app,” At the time, the company communicated individually with each driver,” Uber chief executive Travis Kalanick told  

“It was clear from those early conversations that drivers really valued the freedom Uber offered. Today, while the number of drivers using our app has grown dramatically, their reasons for doing so haven’t changed. In the US almost 90% say they choose Uber because they want to be their own boss,” Kalanick said.

ALSO READ: Clerk gets awarded HK$140,000 for a day’s work

Image: Shutterstock

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