Judge rejects $100M settlement in key case with Uber drivers

A federal judge has rejected as unfair a legal settlement that would have divided up to $100 million among about 380,000 Uber drivers to resolve claims ride-hailing service has been exploiting them by treating them as independent contractors instead of employees.

The decision issued late Thursday by U.S. District Judge Edward Chen complicates Uber’s efforts to remove the threat of the drivers being classified as employees.

That distinction would cause the San Francisco company to make a variety of changes that would cause its expenses to soar and undercut its plans to eventually sell its stock in an initial public offering.

Uber says it is considering its options. Those could include negotiating a revised settlement.

An attorney representing the drivers didn’t immediately respond to a request for comment.