UBER’s Liability for its Drivers’ Wrongful Actions

On behalf of Stulce & Yantis posted in Uncategorized on Tuesday, September 26th, 2017

Uber Technologies, Inc. is the creator of the transportation app Uber. This smart phone app provides users with a list of available drivers in their city that can pick them up and take them to their destination. Uber has drivers in most major cities. The drivers use their own vehicles to transport passengers. Uber calls these drivers independent contractors. Since the vehicles are not company-owned, and the drivers are not Uber employees, courts have struggled with imposing traditional respondeat superior concepts of liability on Uber for the drivers’ wrongful actions.

However, it is important that lawyers look beyond Uber’s classification of its drivers as independent contractors. Instead, lawyers must conduct discovery on Uber’s exertion of control over the driver through the implementation of policies and procedures and the selection and termination of the driver. According to Uber’s website, Uber compares itself to a trucking company and its drivers to truck drivers. In soliciting drivers, Uber explains the requirements, licensing (or lack thereof), and average earnings between being an Uber driver and a truck driver.

Uber represents that its drivers make an average of $19.04 per hour with no requirement for a CDL or set schedule. Yet, Uber drivers are entrusted to transport people safely. On the other hand, a truck driver makes $18.37 per hour with a CDL requirement and regulations governing their schedules. Yet, truck drivers transport goods – not people.

In addition to comparing itself with a trucking company, Uber maintains a commercial automobile insurance policy that covers U.S. partner drivers that provide ridesharing. This policy provides the following:

• $1 million of liability coverage per incident. Uber holds a commercial insurance policy with $1 million of coverage per incident. Drivers’ liability to third parties is covered from the moment a driver accepts a trip to its conclusion. This policy is expressly primary to any personal auto coverage (however, it will not take precedence over any commercial auto insurance for the vehicle). Uber has provided a $1 million liability policy since commencing ridesharing in early 2013.

• $1 million of uninsured/underinsured motorist bodily injury coverage per incident. In December 2013, Uber also added uninsured/underinsured motorist coverage. In the event that another motorist causes an accident with a rideshare vehicle and the motorist doesn’t carry adequate insurance, this policy covers bodily injury to all occupants of the rideshare vehicle. This is important to ensure protection in a hit and run.

• Contingent comprehensive and collision insurance. If a ridesharing driver holds personal comprehensive and collision insurance this policy covers physical damage to that vehicle that occurs during a trip up to the actual cash value of the vehicle, for any reason, with a $1,000 deductible.

• No fault coverage (e.g., Personal Injury Protection) is provided in certain states at similar levels as limos or taxis in those cities.

• $50,000/$100,000/$25,000 of coverage between trips. During the time that a ridesharing partner is available but between trips, most personal auto insurance will provide coverage. However, if the driver does not have applicable coverage, Uber maintains a policy that covers the driver’s liability for bodily injury up to $50,000/individual/accident with a total of $100,000/accident and up to $25,000 for property damage. This policy meets or exceeds the requirements for 3rd party liability insurance in every state in the U.S.

To become a driver with Uber, you must sign up on Uber’s website. This process is quick and easy, allowing almost anyone to become an Uber driver. Uber must approve the driver based on the driver license, registration, proof of insurance, and other information. Uber promises to provide drivers with everything they need to be a success on the road. Lawyers should seek hiring and training materials to determine the extent of Uber’s investigation of its drivers.

Uber’s position in accident cases is that it is not responsible for the negligence of its drivers because it merely provides a phone app that allows drivers and passengers to communicate. However, it seems that Uber does much more than this. Uber selects the driver, provides the driver with “everything” the driver needs to drive successfully, and covers accidents with insurance. Lawyers should not give up on respondeat superior.

However, lawyers have an obligation to look for ways to hold Uber directly liable. For instance, Uber policies and contracts may show that Uber assumes the duty to hire, train, supervise, and retain. Uber may assume the duty to ensure the car is properly maintained and that the rider is safe. For instance, Uber’s website contains a page on passenger safety and promises that it reviews all feedback because “our goal is to make every ride a great experience.”

In fact, Uber provides a 24/7 Support Team that “is always ready to respond to any questions you may have about your trip and help you retrieve lost items.” Uber’s website promises safety for its riders. Even if a State does not recognize a common law duty in this situation, most States recognize the voluntary assumption of those duties. As Uber continues to expand its presence to more cities, the legal doctrine surrounding liability must be used creatively to hold Uber accountable for its drivers’ negligence.

If you would like more information about these cases, you can contact Arnold Stulce or John Yantis. They can be reached at 423-267-9072 or by email at jyantis@stulceyantis.com or astulce@stulceyantis.com.

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