The drivers who work for the United States’ two largest rideshare companies, Uber and Lyft, are not employees. They are independent contracts. Among other things, this means that the two companies generally avoid liability when one of their drivers causes a serious car accident.
But Uber’s and Lyft’s practice of categorizing almost their entire workforce as independent contractors is the subject of a lawsuit here in California. At trial, plaintiffs successfully argued that the companies were misclassifying their drivers and that they should be considered employees under state employment law. The companies appealed, but the appellate judge recently upheld the decision.
When employment law affects personal injury law
Most of the media focus on this case is on the implications for Uber and Lyft drivers, specifically their rights to employee benefits and legal protections. But from a personal injury law perspective, this ruling could be very significant.
The legal principle of responeat superior makes an employer responsible for any personal injuries caused by one of its employees if that employee was in the course of their job duties when the injury happened. A professional driver chauffering a customer to their destination would almost certainly be in the course of their job duties if they cause a car accident by acting negligently. While the driver would also be personally liable, companies like Lyft and Uber would have much more money to compensate an accident victim for their injuries.
The law may not change for a while
Don’t expect California’s rideshare drivers to become classified as employees anytime soon. For one thing, the appellate judge’s ruling states that it would not take effect until at least 30 days after the case is returned to the trial level. That gives Lyft and Uber time to appeal to the state supreme court. Both companies have threatened to stop doing business in California rather than reclassify their drivers.
Meanwhile, the companies are asking voters to support Prop. 22, which would give rideshare drivers some benefits without turning them into employees. The companies’ liability in car accidents caused by their drivers would not be affected.