As Uber has grown into a ride-service behemoth, two particular challenges have emerged. One involves how Uber drivers should be classified for employment purposes. Are they employees of the billion-dollar company or just independent contractors? While this issue has important ramifications from an employment law and personal injury law standpoint, a related concern is whether Uber is liable for accident injuries caused by its drivers.
On New Year’s Eve 2013, a child pedestrian was hit and killed by an Uber driver in San Francisco, prompting the public to question whether the company would accept liability on behalf of the actions of its driver. Uber responded by denying fault, arguing that the driver was not acting within the course and scope of his employment. Relying on the fact that the driver was without passengers and in between fares, the company stated that the driver’s personal auto insurance policy should apply rather than Uber’s million-dollar policy. Plaintiffs contended that because the driver was logged into the Uber app, he was essentially operating as an employee of the company regardless of whether he was carrying passengers. Ultimately, while the case was not decided by the courts, Uber implicitly accepted responsibility for the death by agreeing to a confidential settlement agreement with the family of the child.
But what about the argument Uber has so readily fashioned regarding the employment status of its drivers? Time and again, the company has argued that its drivers are independent contractors, not employees. Pointing to the flexibility of the job and drivers’ use of their own vehicles, Uber has eschewed the label of “employer” and all of its associated responsibilities. While the debate as to Uber’s employment status remains officially undecided, the California Labor Commission has chimed in with its opinion. A few months back, they ruled in favor of an Uber driver in her quest to be labeled an employee.
Uber, like many trailblazing business platforms that preceded it, is beginning to realize that innovation often comes with unexpected costs. Just how they adjust to these “costs” should be interesting to watch. For more information on auto injury claims, feel free to contact the Law Office of Aman N. Shah at 714-312-3974.