If an Uber or Lyft driver crashes into you and causes severe injuries, is the ridesharing company responsible for their driver's actions?
As of May 2016, Uber and Lyft both entered into separate settlements classifying their drivers as "independent contractors." A federal judge in San Francisco is deciding whether to approve or disapprove of the agreement.
If approved, Uber drivers will be considered independent contractors and not actual employees of the company, for employment and labor purposes. This decision affects drivers' rights to benefits, tax withholdings, workers' compensation, and other labor related issues.
As we are a personal injury and car accident law firm, focusing exclusively on serious and catastrophic injuries, we will look at how this agreement affects their responsibility should a driver run over a pedestrian or causes a car wreck.
All Uber and Lyft Drivers carry insurance if they are logged in to their app. If an Uber or Lyft driver has logged into their app, they carry insurance as required by California law. How much insurance they carry varies by the "phase" they are in. Read more about ridesharing insurance requirements here.
While there is a lot of overlap, the test for deciding the driver's labor classification, is different than the test for deciding the company's legal liability for injuries their drivers cause.
In both cases, the general question is: Does Uber/Lyft exert enough control over their drivers' workday, that it should be considered the boss and not just a provider of an app that helps them pick up passengers.
The basic rule in California is that, an employer is generally liable for the acts of their employee, when their employee is in the "course and scope" of employment. An employee is acting within the scope of their employment if they are performing tasks they were hired to perform, or tasks similar and foreseeable to the employment.
While true, the court will ignore the "classification" of the drivers and look to the company/driver relationship. How much control has the company retained over the driver's workday? Do they control hours, salary, conditions, etc?
In California, the case law is favorable to plaintiffs injured by "independent contractors." In other words, California case law leans in favor of finding the driver is an employee for purposes of negligence.
This is a big blow for those looking to hold Uber and Lyft responsible for injuries caused by their drivers. One of the biggest factors proving an employer/employee relationship, is proving how much control the employer retained. They don't necessarily have to exercise the power, just that they retain the power.
And the California Supreme Court has said, the biggest power an employer can retain, is the ability to fire/discharge someone "at will." Discharging someone at will just means letting them go, for no reason whatsoever. Basically, they can fire you because they feel like it, and don't even need to provide a reason.
Prior to these two settlements, both Uber and Lyft had clauses in their agreement allowing them to discharge or deactivate them for any reason or no reason at all. This is the strongest evidence proving a company is actually an employer.
The question of whether Uber and Lyft is responsible for injuries caused by their jurors remains open. The ridesharing industry is so new, the law and regulations are literally changing, week by week. The critical question is whether they retain enough control over their drivers to be considered an employer.
While not answered yet, this should be settled by the courts once a case actually goes through trial, and the verdict appealed to an appellate court, and possibly the Supreme Court.