A judge has rejected Uber’s $100 million settlement with drivers, according to a court filing on Thursday.
Judge Edward Chen denied the plaintiff’s motion to settle the case, saying that it was neither fair nor accurate, citing the tipping policy as one change not nearly as valuable as the settlement had suggested.
In April, Uber announced that it had agreed to settle a court case brought by drivers in California and Massachusetts for $84 million. If the company went public at a higher valuation, then it would have had to cough up an extra $16 million to bring it to $100 million.
But Chen disagreed that the contingency payment could ever be considered part of the settlement, since no information was given on the likelihood of Uber going public or at a valuation that would trigger the additional $16 million.
Chen was also “not convinced” that the change to tipping policy would actually result in more money in drivers’ pockets. Uber had promised to clarify that tips are not included in fare, but also actively discouraged it, Chen wrote.
“Given the lack of an in-app tipping function and Uber’s active dissuasion of tipping, the value of this tipping policy … is, while not meaningless, not nearly as valuable as Plaintiffs suggest,” Chen wrote.
Uber told Business Insider that it was “disappointed” in the decision to deny the settlement.
“The settlement, mutually agreed by both sides, was fair and reasonable. We’re disappointed in this decision and are taking a look at our options,” Uber said in an emailed statement.
Here’s a portion a statement sent to Business Insider from the plaintiff’s lawyer, Shannon Liss-Riordan:
I am disappointed the judge did not approve the settlement, but I understand and I have heard him … In light of this order, we will have to see what happens next. It is possible the parties could reach a revised agreement that satisfies the court’s concerns regarding the PAGA claims. But if not, as I’ve said before, I will take the case to trial and fight my hardest for the Uber drivers.
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