U.S. Courts Now Holding Uber And Lyft Responsible For Their Drivers’ Actions

A man hailing a rideshare taxi

Since their inception, rideshare companies like Uber and Lyft have stated that their drivers are not their employees, but rather independent contractors.  Why?  By taking this position, Uber and Lyft avoid taking responsibility for their driver’s actions when they cause crashes and injure others. 

Under the law, a company is responsible for the actions of its agents and employees. This means the company can be held financially responsible for the injuries and damages caused by those agents and employees.  Uber and Lyft seek to evade that responsibility by classifying their drivers as independent contractors.  However, several recent court rulings have rejected the argument that rideshare drivers are independent contractors. These decisions will help injured people hold Uber and Lyft responsible for the actions of their drivers going forward.

A Rhode Island Jury Rules That Uber Controls Its Drivers

In January, a Rhode Island District Court was faced with the question of whether Uber drivers were agents of the company or independent contractors.  The plaintiff in the case had summoned an Uber via the application on his smartphone.  During the trip, the Uber driver crashed into a vehicle that had been abandoned on the roadside, which caused injury to the plaintiff.  The plaintiff sued the driver and Uber.

Uber attempted to have the case against it dismissed, arguing it had no responsibility for the driver’s actions because the driver was an independent contractor, not an employee.  Uber argued that it is merely a software provider with no actual control over its drivers.  The district court judge rejected this argument and found that a jury should decide whether the driver was an employee or an independent contractor.  The court determined that there was credible evidence that Uber controls many aspects which support an employer-employee relationship, including:

  • The drivers’ finances
  • Branding and marketing
  • Requirements for quality, cleanliness, and behavior
  • Offering benefits to drivers
  • Requiring drivers to submit drivers’ license information, vehicle registration, and pass a background check

The judge concluded that “reasonable people could differ on whether a worker is an employee or an independent contractor based on the evidence in the case,” and allowed the case to proceed to a jury. 

U.S. Court Of Appeals Rules That Uber Drivers Are Employees, Not Independent Contractors

 At the beginning of March, the United States Court of Appeals for the Third Circuit similarly determined that a genuine issue of fact existed as to whether Uber exercised control over its drivers such that they should be considered employees.  That case arose out of a class action brought by Uber drivers alleging violations of the Fair Labor Standards Act (FSLA) and the Pennsylvania Minimum Wage Act (PMWA).  Uber again attempted to avoid responsibility by arguing that their drivers were independent contractors rather than employees. Therefore, the FLSA and PMWA did not apply. 

After the trial court initially agreed with Uber and dismissed the case, the appellate court reversed that decision because it found there were disputed issues regarding agency and that the case should not have been dismissed.  The appellate court found that there was significant evidence that Uber decides the fare, decides which driver receives a trip request, controls whether to refund or cancel a passenger’s fare and dictates the driver’s territory, which is subject to change without notice, all pointing to the existence of an agency relationship, rather than one of independent contractor.

France Court Also Agrees That Uber Drivers Are Employees

These types of legal questions are not only circulating in U.S. courts but also around the world.  Also, in March, the highest court in France, Cour de Cassation, upheld a lower court decision that found Uber drivers are not “self-employed” but instead are under the control of the rideshare company.  The court found that “[w]hen connecting to the Uber digital platform, a relationship of subordination is established between the driver and the company.”  Therefore, the court concluded, “the driver does not provide services as a self-employed person, but as an employee.” 

Holding Uber And Lyft Accountable Helps Injured Plaintiffs

These cases go a long way in establishing a body of law under which rideshare companies can be held responsible for the actions of the drivers under their control.  This is an important area of law because companies like Uber and Lyft have larger insurance policies than most individuals, so they’re able to pay for any significant damages their drivers may cause.  Uber and Lyft’s current position not only serves to deprive injured people of proper compensation but also leaves the individual drivers holding the bag for a plaintiff’s entire damages. 

If Uber and Lyft are entitled to the profits generated by the work of their drivers, they should likewise take responsibility for their drivers when they cause injuries to others in an effort to generate those profits.  Given the recent developments both domestically and abroad, it appears that courts may finally be willing to hold companies like Uber and Lyft responsible.

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