As many Arizona company owners are aware, the classification of employees or independent contractors can be the impetus for lawsuits from individuals. In fact, that issue was one of many that were alleged in two class action suits against Uber filed by approximately 385,000 of the company's drivers. Recently, Uber reached a settlement that dealt with at least some of the contract disputes involved in the lawsuits, but did not address the classification issue.
One of the disputes that was resolved involved allowing drivers to address any complaints regarding their performances before the company terminates their employment. The company was also deactivating drivers if they turned down rides on a frequent basis. Uber has agreed to stop this practice as part of the settlement.
The company will also institute a process whereby a driver's payment disputes can be addressed internally, and they also agreed to establish a panel to handle appeals. Drivers who are not satisfied with the results are entitled to a chance at arbitration, which will be at the expense of the company, not the driver. Riders will also be advised that a gratuity is not included in the price of the ride, and drivers may solicit tips.
The settlement also provides for payments of approximately $100 million to drivers involved in the two class action suits, which Uber most likely believes will be less expensive for the company in the long run. Arizona companies involved in employment contract disputes might also determine that the best resolution for the company would be to negotiate a settlement in order to avoid a major policy change that could jeopardize the company's future. Furthermore, this could save the time and money that goes along with litigation.
Source: Los Angeles Times, "What you need to know about the Uber settlement", Samantha Masunaga, April 22, 2016