Uber Class Action Lawsuit Settlement Means Drivers Remain Independent Contractors

Last week’s settlement by the rideshare company Uber of a pair of class action lawsuits in California and Massachusetts means the company won’t have to change a key part of its business model … at least for now. I also have items about Uber’s involvement in a new lobbying group to promote autonomous vehicles, a new report on how ridesharing services could help fill the gaps in low-income communities not well served by transit and how some communities are trying to deal with the issues presented in allowing Uber to operate in their jurisdictions while protecting the interests of others. Plus updates on a couple of key conferences later this year you might want to attend.

Uber Settlement

Uber’s settlement agreement covers about 385,000 of its drivers in California and Massachusetts. Under the agreement, Uber will pay them $84 million, with an additional $16 million if the company goes public. In exchange, the drivers will remain independent contractors, The Washington Post reported. That means Uber still won’t have to provide elements of a social safety net for these drivers—things like health and workers’ compensation insurance.

But drivers in the two states did receive some important concessions in the agreement, Next City noted. Uber will now have to give drivers two warnings and an explanation before deactivating drivers. The company will also stop deactivating drivers who frequently turn down rides and create an appeals panel so drivers can contest deactivations. Uber drivers will now also be able to solicit tips in the two states and the company will make it clear tips are not included in the price of the ride.

A Forbes op-ed argues that “the non-monetary aspects of the settlement, however, raise some serious concerns about the safety and convenience of the service.”

As The Post pointed out however, the settlement doesn’t set any legal precedent. It appears unlikely to resolve ongoing arguments about the nature of the sharing economy. Moreover, Uber still faces other unresolved lawsuits. “A ruling against Uber in court, which is still possible in the other cases, would cost it millions annually and could set precedents for other businesses,” the newspaper reported. “Workers classified as employees would be covered by federal labor laws and other regulations which would have entitled the drivers to coverage under minimum wage laws, unemployment benefits, workers’ compensation, the right to form unions under the federal labor law and reimbursement of expenses.”

The nature of the sharing economy and efforts to provide a social safety net for its workers are a focus of my article in the forthcoming May/June 2016 issue of CSG’s Capitol Ideas magazine.  

Uber Part of Autonomous Vehicle Lobbying Group

Uber is joining forces with rival Lyft, Google, Ford Motor Company and Volvo to form a coalition to advocate for safety regulations for self-driving cars, Bloomberg reported. The group reportedly plans to work with lawmakers, regulators and the public to “realize the safety and societal benefits of self-driving vehicles.” Dubbed the Self-Driving Coalition for Safer Streets, the group will be led by former NHTSA Administrator David Strickland. As Politico noted this week, Strickland wants to emphasize the opportunity his former agency has to show leadership and help discourage “a patchwork of laws that would slow down or significantly delay the implementation of fully self-driving cars.” NHTSA, the National Highway Traffic Safety Administration, has been tasked to come up with a set of rules for self-driving cars by early summer.

CAP Report on Rideshare & Transit

The Center for American Progress released a report this week calling on Congress to establish a pilot program that would allow public transit agencies to use federal funding to pay rideshare services to provide transportation for people in low-income communities not well served by transit. “These new providers offer transit agencies the opportunity to experiment with different ways to overcome the last-mile barriers to connect people with the public transit system,” write the organization’s Kevin DeGood and Andrew Schwartz. “Congress should authorize a pilot program to allow a limited number of public transit agencies with a fixed-guideway rail system to flex a portion of their federal funding to pay a portion of the cost of ridesharing trips that connect qualified low-income residents with the rail system.”

Uber Presents Challenges for Local Officials

Houston’s requirement that Uber drivers undergo fingerprint-based background checks is prompting the company to threaten to cease operations in the Texas city unless the city council repeals its regulations, The Texas Tribune reported. Uber competitor Lyft pulled out of Houston over a year ago because of the new rules but Uber has continued to operate in the city. According to a report released by Uber, Houston’s regulations have led to a decrease in the number of drivers and, in turn, “fewer safe rides.” Following the adoption of similar background check requirements in Corpus Christi, Galveston and Midland, Uber ceased operations in those cities. Voters in Austin will have the opportunity to decide May 7 if that city adopts an Uber- and Lyft-approved ordinance that would prevent the city from requiring such checks.

Meanwhile, a press conference this week about an effort by Newark, New Jersey officials to broker a deal with Uber and the city’s taxi drivers dissolved into bickering and name-calling, Politico New Jersey reported. In a deal negotiated by Newark Mayor Ras Baraka with Uber in mid-April following a months-long standoff, the company was allowed to operate at Newark Liberty International Airport, in return for a permit fee of $10 million. But taxi drivers don’t like the agreement, despite a requirement that Uber drivers not wait for passengers in designated taxi areas at the airport but at an off-airport location.

Upcoming Meetings

InfraAmericas Forum: Organizers of the InfraAmericas U.S. P3 Infrastructure Forum, which takes place June 15-16 at the Grand Hyatt in New York City, recently announced that former Indiana Governor Mitch Daniels, who now serves as President of Purdue University, will be a keynote speaker at this year’s event. Daniels’ tenure as Governor included the lease of the Indiana Toll Road, passage of the Major Moves transportation funding program and a deal with Kentucky to build the Ohio River Bridges Project. CSG is once again serving as a supporting organization for the InfraAmericas forum, which brings together state and federal public officials with infrastructure developers, investors, financiers and regional transportation authorities for an essential conversation about the state of the P3 industry. Now in its twelfth year, the forum features informative panels and key networking opportunities. Other speakers announced so far include Douglas Koelemay, the Director of Virginia’s Office of P3s, and Shailen Bhatt, Executive Director of the Colorado Department of Transportation. You can register to attend the event at this link. And for more of an idea of what to expect, check out my coverage of last year’s event.

Transportation for America Conference: This fall Transportation for America will host its Capital Ideas II Conference (not to be confused with CSG’s Capitol Ideas) focused on state transportation funding and policy. State and local officials from around the country will gather November 16-17 in Sacramento, California to examine best practices, campaign tactics and innovative policies. You can sign up to be notified when registration opens on the T4America Capital Ideas website. The first Capital Ideas Conference took place in Denver in 2014. I spoke with T4America Director James Corless about the purpose of that conference. You can read his comments here. My full report on the conference can be found here.