Uber has avoided court by settling two class action lawsuits that could have hurt the company further.
The transportation services company was facing suits in California and Massachusetts that could have made its workers company employees, rather than freelance contractors.
The company will have to pay $84 million to about $385,000 drivers as part of the settlement — plus an additional $16 million divvied up if it launches an IPO — but steering clear of court is a huge win for Uber.
Losing the lawsuit could have forced the company to hire its employees, leading to Social Security payments and minimum wages. Instead, keeping workers as independent hires with flexible schedules ensures that Uber’s profitable business model ensues.
A $68 billion Uber IPO may be in the wings, but you shouldn’t hold your breath for it.
