Elizabeth Weise

USA TODAY

SAN FRANCISCO – Uber drivers made news last week when the company settled class-action suits that could pay drivers as much as $100 million, but court documents show that most eligible drivers will probably get less than $25.

The suits covered Uber drivers in California and Massachusetts who said they were not independent contractors, as Uber claimed, but employees.

Uber contends its app is merely a conduit between drivers and riders and that it does not employ drivers. Its business model is based on that presumption, which keeps its costs low.

Uber to pay up to $100M in driver status suits

In the settlement filed in U.S. District court in Northern California on April 21, Uber agreed to pay the plaintiffs $84 million, with a second payment of $16 million if the company goes public and its valuation increases one and a half times from that of Dec. 2015.

However, most drivers who were eligible for the settlement will see very little of that amount.

Payouts depend on how many miles the driver drove with Uber and whether he or she opted out of Uber's arbitration clause in its 2013 and 2014 driver agreements. More importantly, all estimates depend on how many eligible Uber drivers actually file to claim the money. The more who do, the lower the amounts that will be paid out.

The settlement covers all Uber drivers who ever drove in either California or Massachusetts, which is about 385,000 drivers, according to Shannon Liss-Riordan, a partner at Lichten & Liss-Riordan, the Boston firm that brought the class action suits.

While it’s not known exactly how many Uber drivers there have ever been nationwide, the number of current drivers in the United States is around 450,000, she believes.

“So this covers a pretty big chunk of drivers,” Liss-Riordan said.

The differences in payments come because the amount of the settlement drivers in California and Massachusetts are eligible for is proportionate to the number of miles they drove.

“More than 100,000 drivers have driven very little, so a lot of people are going to get very small payments because they’ve driven very few miles,” she said.

However drivers who’ve driven many miles will get, on average, $8,000, she estimated.

The $8,000 presumes that about half of eligible drivers will file to claim their money. If more file, the amount the drivers are paid will fall, according to court documents.

Drivers who drove fewer than 750 miles and who signed the arbitration clause could receive as little as $24. That figure is based on 100% of drivers filing to take part. If fewer do, the number could increase.

The lawyers who brought the case intend to apply for fees and costs of no more than 25% of the settlement. That would be $21 million of the $84 million but $25 million if Uber goes public and does well, court documents show.

DEACTIVATION POLICY

Uber agreed to other changes that will affect all drivers, not just those in California and Massachusetts.

One is a "comprehensive deactivation policy" that requires Uber to only cut drivers off from using its app for "sufficient cause" according to court documents. Drivers must be given at least two warnings prior to being cut off, except for reasons of safety, fraud, discrimination or illegal conduct. They must also be given a reason for being deactivated in writing.

Uber also agreed to give drivers more information about how its star ratings and ranking systems work..

It will also fund and facilitate a Drivers Association in California and Massachusetts that will allow drivers to elect leaders who will meet on a quarterly basis with Uber to address issues faced by drivers.

UBER AND TIPS

The settlement also confirmed that Uber's policies don't prohibit drivers from requesting tips.

It required Uber to clarify on its website and in communications with both drivers and riders that tips are not included on Uber's app, except for UberTAXI, and that "tipping is neither expected nor required," according to court documents.

“My hope is that once passengers realize that tips aren’t included, because Uber has been misrepresenting to them that tips are included, that will substantially increase the number of passengers who tip and that will make a big change for drivers,” she said.

Not only are the amounts drivers might get small, but the settlement doesn’t address what Scott Solombrino, co-founder of the National Limousine Association, called the underlying issue of drivers misclassified as either independent contractors, rather than employees.

“This is about protecting the American worker. Uber effectively controls their drivers as employees, but refuses to fairly compensate them (e.g. overtime, workman’s compensation, health care),” he said.