Uber drivers may have just lost their $100 million cash settlement

ByJames Dennin

A $100 million cash settlement between Uber and 385,000 of its California and Massachusetts drivers is up in the air after a federal judge's ruling on Thursday. 

Coincidentally, the announcement came the same day as Uber's announcement that it would be rolling out the first of its driverless cars in Pittsburgh in the next several weeks

The ruling appears at first to favor the drivers, with District Judge Edward Chen ruling that it wasn't fair to them, and that some of Uber's concessions — such as letting drivers use tip jars —  were unlikely to make up for all the money they might have gotten had they gone to trial.

In April, Uber and its drivers reached the settlement over a class-action suit that sought back-pay and reimbursements for work-related expenses like tolls and gasoline. 

Susan Montoya Bryan/AP

The ruling was seen as a major referendum on the "gig economy" of startups that make heavy use of part-time contractors who can work on their own schedule. 

Several dozen Uber drivers and their lawyers felt that the settlement was inadequate. However, attorneys on both sides expressed disappointment in the ruling. 

The problem for drivers, legal experts explained to Bloomberg, is that now Uber can try and settle the claims one by one, as opposed to settling with the entire group. 

Other ride sharing companies have faced similar difficulties over how, exactly, their drivers should be classified. 

Last June, a California judge ruled that Lyft's could receive up to $27 million from the company to settle similar claims that they should be considered full-time employees and protected by state labor laws.