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$3M proposed deal would end Uber class action on behalf of New York drivers

By Pamela Wolf, J.D.

Under a proposed agreement submitted by the two named plaintiffs, rideshare giant Uber would pay $3 million to settle class breach of contract and other claims of drivers in the State of New York, largely focused on the company’s failure to remit tips to drivers and practice of urging passengers not to tip. The complaint also includes allegations that drives were misclassified as independent contractors instead of employees. The deal, if approved by the court, would resolve the potential claims of an estimated 40,000-plus drivers and former drivers.

Settlement class. Specifically, the settlement would cover individuals who have provided transportation services arranged using the Uber app within the State of New York between December 29, 2009, and the date on which the court preliminarily approves the deal, and who have either purported to opt out of arbitration, or whose most recent agreement with the Uber defendants does not include an arbitration provision. The deal would not cover individuals who exclusively provided transportation services arranged using Uber’s “uberTAXI” product.

The plaintiffs and the defendants (which include Uber Technologies Inc., Rasier LLC, Uber USA, LLC, Uber New York LLC, Uber Transportation LLC, and presently unknown Uber affiliates) engaged in extensive settlement discussions, including private mediation with an experienced mediator, according to the proposed agreement.

Settlement terms. Under the deal, $3 million would be the maximum gross settlement amount that the Uber defendants would be required to pay. From that fund would be deducted class counsel fees of not more one third of the gross settlement amount and class counsel costs of not more than $29,055. The named plaintiffs would receive a total of $3,500 in settlement of their claims, and one named plaintiff would be given a service payment of $2,000 for services he performed in assisting class counsel with the litigation and pursuing this litigation. An estimated $25,000 in costs would also be deducted from the gross settlement amount.

Individual settlement calculation. Each settlement class member who completed a trip and/or received payment for a completed trip in New York State during the settlement period would receive a flat amount of $100. The individual settlement amounts would be determined by taking the remaining amount in the net settlement, divided by the total amount of New York State sales tax and Black Car fund fees charged for rides for which all settlement class members had received payment during the relevant period, multiplied by the amount of New York State sales tax and Black Car Fund fees charged for rides for which each settlement class member received payment during this time period, and allocating it accordingly.