The Gig Economy and Liability for Contractor Crashes

On Behalf of | Jun 19, 2016 | Car Wrecks

The ongoing lawsuits by Uber and Lyft drivers against their respective companies raise an interesting question: when these drivers cause car crashes, are the companies liable for damages? After all, when taxicab, limousine, and courtesy shuttle drivers cause car crashes, their employers are nearly always on the hook for damages.

However, ridesharing drivers do not operate under the same conditions of employment. They do not work fixed schedules, are typically not responsible for certain areas and are under no obligation to pick up fares from a dispatcher. Furthermore, they are paid by the trip instead of by the hour and they use their own vehicles instead of company-provided equipment. But, despite these differences, they may still be “employees” under applicable negligence laws.

Defining Employer-Employee Relationships

Last summer, the Department of Labor issued guidelines that embraced an extremely broad and plaintiff-friendly view in this area. Many courts have traditionally applied a control test to distinguish between employees and independent contractors. Basically, the more control that the employer had over the worker, in terms of the hours worked, manner of employment and so on, the more likely it was that the worker was an employee.

But the current trend seems to call back to the original definition of employment, which is “suffer or permit to work.” This definition is somewhat useless in many respects, but in negligence law, it means that when money changes hands, there is an employer-employee relationship.

The DOL also discussed the related “economic realities” test, which follows a similar analysis. In the real world, Lyft and Uber drivers are normally economically dependent on the companies, because driving around town, picking up pedestrians, taking them to their destinations, and charging them is not a very practical business model.

So, it appears that ridesharing drivers arguably meet the negligence law standards for “employees.” Respondeat superior’s second prong – course and scope of employment – applies every time a ridesharing driver picks up a fare and continues to apply even if the driver stops for gas or deviates from the planned route.

The tortfeasor (negligent driver) may not be the only party responsible for damages in a car crash case. For a free consultation with an experienced personal injury attorney in New Braunfels, contact The Bettersworth Law Firm at 830-443-9193. An attorney can arrange for victims to receive ongoing medical care, even if they have no money and no insurance.