From Inc., Sunil Rajaraman describes how Uber won even though it settled the class action lawsuit with Uber drivers. Sunil identified these winners:
Uber. Uber was the first company to really push the boundaries of tech innovation and regulation at the same time. Airbnb followed suit shortly thereafter, but Uber deserves a lot of credit and criticism for being brazen and dismissive of regulation. They are being handsomely rewarded as a result.
If you think Uber is sweating over a $100 million settlement after having raised $9 billion, you are dead wrong. Uber’s business model is now validated and completely bulletproof. Ladies and gentlemen–we have precedent.
The On-Demand Economy. Dozens of on-demand companies were sweating over the outcome of this lawsuit. Everyone can now breathe a huge sigh of relief. Uber settled its case and gave up some extremely minor concessions, relatively speaking. This is in contrast to a year ago, when many on-demand startups were stressed out about potential regulatory issues in the wake of the demise of Homejoy.
This is also great for consumers of on-demand services, who don’t have to worry about the prospect of their favorite companies going under because of regulatory issues (although unit economics are another issue altogether).
Venture Capitalists Who Invested in On-Demand Companies. It feels like only bad news has been coming from the on-demand space lately, but all of a sudden we have the best news possible. VCs who put money into the space can breathe easy now that a huge portion of the business model risk of these companies has effectively been eliminated.
Between the Uber case and the LiveOps case, there will not likely be another major class action suit brought forward (that has merit) against on-demand companies.
Read the full story at How Uber Paid $100 Million to Settle a Lawsuit, and Still Won