Increasingly, people are using their cars for work – not only to get to and from the workplace, but as a source of income. Uber claims that it has two million drivers around the world with three-quarters of a million of those in the U.S. But, it is unclear if Uber actually employs those drivers and if the company is responsible for any accidents or misconduct by the driver.
Uber maintains that its drivers are independent contractors: they drive their own vehicles, set their own hours, and often pursue other employment. The distinction between “employee” and “independent contractor” isn’t merely semantic. If Uber drivers are employees, then the company becomes subject to a host of employment laws, including laws governing overtime, benefits, minimum wages and liability. Currently, Uber’s liability for its drivers’ conduct, whether that conduct involves getting into an accident or assaulting a passenger, is unclear. In case of an accident, Uber maintains an insurance policy that covers passengers in the car; however, if the damages exceed what is available under that policy, the passenger would sue the driver that caused the accident. It’s also unclear if Uber is liable for bad conduct like sexual assault. Sexual assaults of passengers by drivers remain a persistent problem for the ridesharing giant. A CNN investigation discovered over a hundred reported assaults in the past four years. The company has taken steps to raise awareness of the problem, but its liability remains unclear.
It is also unclear whether Uber is an employer bound by a panoply of state and federal wage and hour laws. While Uber and its business model have been a fixture in many urban economies for most of the past decade, its status and relationship with its employees remain unresolved by the courts. Courts have been split on their classification and treatment of Uber. A recent decision by the Ninth Circuit (in a case involving driver designation) held that Uber’s drivers agreed to have their disputes governed by private arbitration, which tends to favor businesses over individuals. In contrast, a decision by New York’s Unemployment Insurance Appeal Board found that Uber exercises enough control over its drivers to be considered their employer. No single case has resolved these issues, but, with the gig economy growing, the questions swirling around Uber and the responses offered by the courts are likely to have a significant impact.
Kathleen Davies is a Staff Writer for GetLegal.com. She is a graduate of the University of Michigan Law School and has practiced law and taught legal writing and advocacy.