Uber was unsuccessful twice in settling a California driver's lawsuit that claimed Uber was allegedly violating labor-codes through the "independent contractor" partnership agreements with drivers. One of the biggest issues that drivers claim against Uber is that the contract disclosed drivers from any social benefits while applies restrictions that make driving for Uber seem more like employment then contractual work. Uber, on the other hand, contends that a contract is binding if both sides agree and that constraint is part of any service contract; they set standards for quality of performance.
LA state Judge Maren Nelson stated that she was comfortable with the payment of $1.08 to each of the 1.6 million state of California registered Uber drivers that challenged Uber's independent contractor business model. The real reason that Judge Nelson was comfortable was not the small return the drivers received, but the effect that the finding would have on the future of Uber. Since the case was not settled, no precedent was set, and therefore the issue of Uber's business model can be tried in the future and be judged without bias. Another and the perhaps more interesting reason for the Judge's comfort in the decision is that under the 2004 Private Attorneys General Act (PAGA), the state of California keeps 75% of the cases penalties, which means that the state just earned $5.8 million.
Judge Nelson concluded that "the amount of settlement is fair and justified under the circumstances."