The drivers of app based car services are considered to be independent contractors, not employees and not on the clock unless there is a passenger in their car. If you examine the car service model, on paper these drivers aren’t employees of either the car service or the tech company. The million-dollar insurance policies that many of these services carry only kick in when the driver has a passenger.
The biggest legal exposure is that of accident liability. What if a driver has an accident that injures the passenger? Sadly, the only recourse for the injured passenger may be the driver’s personal automobile insurance.
The liability could be directly with the service if the plaintiff claims that the company didn’t adequately screen drivers and/or properly train drivers. In one recent suit, Uber is being sued, along with a driver whose individual insurance policy has a $750,000 limit. On New Year’s Eve, an Uber driver killed a six-year-old girl in a San Francisco crosswalk as well as injuring several members of her family. Because there was no passenger in the Uber car, the car service claims they are not liable. The company asks drivers to hang out on the streets during peak times such as New Year’s Eve so they can respond to new requests quickly. Drivers are rated in part by their response time. This is where it gets tricky; the drivers are out there for the economic benefit of both Uber and themselves. Therefore, if Uber shares in the profits, they should share equally in the responsibility,
Uber and other services such as Side Car and Lift use social media to match drivers and passengers; they are match makers not taxi services. The question to be considered is this; when someone is injured or killed by someone they have met through a social media site that charges a fee for that service, will the courts take this type of case and use it to set a precedence with other social media business models?
Tech companies consider themselves to be information content providers and therefore exempt from the same liability as a traditional car service. A close parallel can be found in suits involving independent contractors such as many traditional taxi and delivery services.
When considering services such as Uber, the legal limits of liability may be tested. Among other factors, many cases look primarily at:
- The employer’s control over the worker
- The worker’s opportunity for profit or loss
- The worker’s investment in facilities
- The worker’s skill set
- The length of the relationship
It is too soon to determine how these liability issues will be decided, and the answer seems unlikely to be an easy one. But as more of theses accidents occur, there will be more legal squabbling over how the old laws apply to new models in the techno age; we will see more and more ordinances developed to protect the public from these new app based Silicon Valley companies.