It’s no surprise that ride-sharing giant Uber has a massive presence in New York City. The Big Apple is one of the most profitable cities to be an Uber driver, but one of the most costly at the same time. Uber drivers have to pay a significant amount of fees and taxes, not to mention the upkeep to their vehicles, parking fees, gas, etc. Still, given the amount of steady work there is for NYC Uber drivers, the city attracts tens of thousands of drivers. Now, Uber drivers in New York are on the winning end of a long settlement in which drivers claim the service was overcharging and breaching the terms of their contract. Will this push more drivers away from Uber and onto its competitors?
The suit was launched on behalf of 2,421 Uber drivers who accused the company of breach of contract in 2016 after it was discovered the ride-sharing app was including New York state sales taxes and state workers compensation fund charges. Those service fees were not included in New York drivers’ contracts. Drivers also accused Uber of false advertising by failing to disclose the exact conditions of their offer of guaranteed compensation. Uber drivers won the suit, and now will split the $3 million settlement – after their lawyers take their lion’s share of likely one-third of the entire settlement.
The settlement comes on the heels of a similar class action settlement in 2016 in which close to 400,000 drivers won a $100M class action settlement in which they agreed to remain classified as independent contractors as opposed to employees in exchange for the settlement and a few changes to Uber’s policies. The company also admitted to underpaying New York drivers in May 2018, eventually paying over $80 million to settle those suits. It’s believed there are close to 50,000 Uber drivers in New York. Do these suits show Uber has grown too large?