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Uber Drivers' $100 Million Deal May Set Pace for Gig Economy

  • Biggest ride-share firm avoids risk of costly trial verdict
  • California, Massachusetts drivers stay contractors, get tips
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Uber Technologies Inc. resolved the biggest threat to its business by settling with California drivers suing to be treated more like traditional employees, a move that could have broad-ranging implications for companies across the sharing economy.

The agreement calls for Uber to pay as much as $100 million to drivers in California and Massachusetts and allows them to solicit tips from riders, but keeps them classified as contract workers instead of formal employees, according to statements by a lawyer for the drivers and the company.