Apr 22, 2016 ยท 2 minutes

Uber has settled two class action lawsuits, in California and Massachusetts, for up to $100m.

As many commentators have pointed out, the settlement avoids a court having to decide whether Uber drivers should be categorized as employees or contractors.

Of course, a judicial ruling that Uber drivers are actual employees would be devastating for the rideshare giant. Suddenly they’d have to stop treating drivers like dirt, and pay them something close to a living wage. It’s hard to imagine how a company like Uber would survive having to… yunno… behave with common decency.

For that reason, it’s utterly unsurprising that Uber was keen to settle, even for such a large sum. Similarly, it’s not hugely shocking that underpaid Uber drivers would be willing to drop their complaint in exchange for payment of up to $8,000 each.

The problem, though, is that the settlement still leaves the employee vs contractor question in limbo. As more and more workers enter the sharing economy, that uncertainty can’t stand.

Therein lies the problem with civil law: When you have as many billions as Uber, there’s little to stop you simply settling every case to avoid creating precedent. Or at least settling every case until the company is able to go public, after which all bets are off for the company’s founders and investors. It’d take a class of plaintiffs with balls of steel (and an insane willingness to put their own interests below those of society at large) to resist Uber’s steadily increasing offers and force a trial.

The best hope is for the state to take legal action against the company, rather than a class of private plaintiffs able to be swayed by cash. For example, an enterprising attorney general might launch an anti-trust suit against the company following the logic outlined in this Huffington Post article. In short, that by classifying its workers as contractors, Uber is engaging in unlawful price-fixing.


Unfortunately, given Uber continues to be one of the highest spenders on corporate lobbying in the world,  it seems highly unlikely any lawmaker will go out on that particular limb. As so here we are: Doomed to spend the next few months watching Uber settle lawsuit after lawsuit, spending hundreds more billions of dollars, just to keep the legal ponzi scheme going until they finally IPO.