My wife and I use Uber all of the time. It's great. One does not have to worry about parking or drinking and driving. The service is convenient and easy to use. Ride-sharing technology has been great for consumers.
However, what happens when passengers are injured while riding in an Uber car? With a recent ruling from the California Labor Commission, plaintiffs may benefit. The California Labor Commission found that Uber drivers are employees, not independent contractors. An employee classification for its drivers will mean a number of different things for Uber, including how it deals with injury accident claims.
Under California law, a legal doctrine called "Respondeat Superior" (I know, lawyers love Latin) holds employers responsible for the negligent acts of their employees. Given certain elements must be met, i.e. the Uber driver must have been working at the time of the accident, nevertheless, this ruling will allow injured parties to proceed against Uber directly.
Further, Uber will have to carry $1 million in liability insurance for its drivers. The insurance policy will be excess to the driver, meaning that the driver's own automobile insurance will be primary in the event of a claim. An injured party will first have to recover the policy limit from the Uber driver before he or she can recover from the Uber $1 million policy (not all injuries are serious enough to warrant a claim against an excess insurance policy).
Catastrophic accidents routinely pose difficulties for plaintiffs because there are insufficient policy limits. For example, an injured party may lose the use of his or her legs, but only be able to pursue the defendant's liability insurance, which has a limit of $15,000. In the described hypothetical, the injured party will have to bear great costs, including all disability bills. Should a plaintiff be involved in a catastrophic accident with Uber, this ruling will ensure larger limits, and potentially provide greater protections for the plaintiff.
Finally, the issue of agency, or independent contractor v. employee, is still is being litigated. Uber has pending lawsuits with both state and federal courts in California. While the Labor Commission is a set back for Uber, and a win for consumers, nothing is certain, or settled, at this point.