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What the Uber settlement means for passengers, drivers

by AirTalk®

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In what’s being hailed as a major coup for Uber, the ridesharing company has settled a series of class action lawsuits by drivers. TENGKU BAHAR/AFP/Getty Images

In what’s being hailed as a major coup for Uber, the ride-hailing company has settled a series of class action lawsuits by drivers.

Under the settlement, Uber will pay out a maximum of $100 million to drivers in California and Massachusetts, but it can continue to treat drivers as independent contractors not employees.

That helps Uber keep costs down by avoiding Social Security and health benefit payments to its drivers. But the settlement also makes it more difficult for Uber to fire problematic drivers. Here are some ways the settlement could change the way you use Uber.

Tipping is encouraged

A tip is not included in the cost of your Uber ride, which is contrary to how some users think the service works. Drivers may now post signs in their cars that read, “Tips are not required, but are appreciated.” You don’t have to tip, but that could affect your rider rating.

Your ride request could be turned down

Since Uber drivers are independent contractors who make their own schedules, they have a right to turn down ride requests. This depends on a number of factors including distance, but most riders probably won’t see a big change in how often their request is accepted. Carolyn Said, a technology reporter for the San Francisco Chronicle, says, “[Ride request refusal] might be something that would be subtly apparent to riders... but I don’t think it’s going to have a big impact.”

Customer ratings may be more important

Your rider rating could be a factor in whether or not your ride request is granted. Aside from being a cordial rider, tipping may make a difference in how well you’re rated as an Uber user.  

In-app tipping

While tips aren’t included in the Uber app, the topic of in-app tipping came up during our conversation. Harry Campbell, an Uber and Lyft driver and founder of theRideShareGuy.com, said an in-app tip option would be beneficial for drivers because many riders are under the impression that the tip is included won't tip otherwise.

Guests:

Carolyn Said, business and technology reporter at the San Francisco Chronicle. She covers the sharing economy for the paper. She tweets at @CSaid.

Shannon Liss-Riordan, attorney at Lichten & Liss-Riordan in Boston, Mass., who negotiated the settlement

Harry Campbell, Uber and Lyft driver and founder of theRideShareGuy.com, a blog and podcast for rideshare drivers. He tweets @TheRideShareGuy.

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