Shannon Liss-Riordan, the attorney who is representing approximately 350,000 Uber drivers in California and Massachusetts, told a court she is cutting her proposed fees by $10 million as part of an arrangement to settle lawsuits that Uber misclassified the drivers as contractors not drivers.
The new figure appears in a terse document filed Friday in federal court in San Francisco. It comes six weeks after Uber and the drivers announced the controversial settlement, which could pay see the company pay up to $100 million and modify some of its policies.
Even though the proposed Uber deal only covers drivers in two states, it is being closely watched by many because it could serve as a template not only for Uber, but for other so-called “gig economy” companies that are also facing lawsuits over how they classify workers.
Despite the possible $100 million payout, the settlement ran into trouble almost immediately. Some drivers objected to both the settlement’s terms and its proposed 25% commission for Liss-Riordan and other lawyers. Furthermore, in May, one plaintiff told the court that “the deal is not in my interest or in the interest of any Uber driver.”
The new fee arrangement, which appears designed to mollify some of those objections, would increase the pot of money available to Uber drivers if the deal is approved.
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The document only explains the fee reduction by saying it would “provide additional benefits to the class,” but Liss-Riordan provided further context to a legal news site this weekend.
“I am offended by the allegations that I settled the case for the fees,” Liss-Riordan told The Recorder. “As an experienced and dedicated workers rights advocate for nearly 20 years, I reached an agreement that I believe is in the best interests of the class.”
She added that she is also calling on Uber to increase the base value of the settlement by $10 million. The current arrangement calls on Uber to pay a total of $84 million and $100 million in the event Uber has an IPO in the near future—an unlikely event given CEO Travis Kalanik recently said an IPO would come “as late as humanly possibly.”
For most drivers, the new fee arrangement would mean a modest increase in the payout they receive. Such a payout, in most cases, would likely be around $200.
For Uber, the proposed settlement would amount to a victory since it classifies the drivers as contractors. The designation is good for drivers, according to the company, because it affords them flexibility. But critics counter that it is a legal device arranged to help Uber avoid paying certain benefits.
The case remains before U.S. District Judge Edward Chen, who must decide whether to approve or reject the settlement.
