Are Uber Workers Independent Contractors?
Currently, Uber workers are considered independent contractors. It is an important distinction for accident victims because it makes recovering compensation for damages more challenging. Why does it matter whether an Uber worker is an independent contractor? Let’s begin by defining independent contractors.
What Is an Independent Contractor?
An independent contractor is a self-employed individual who contracts with various companies or clients to perform specific services, typically on a project basis. They are paid for the work they complete, rather than receiving a salary or hourly wage. Independent contractors have control over how they complete their tasks, though the client only controls the final result, not how the work is done. They also have the flexibility to work for multiple clients, often on their own schedule and from any location.
In contrast, an employee works for a single employer, who not only controls the outcome of the work but also oversees how the work is performed. Employees usually have a fixed schedule, work in specific locations, and are subject to supervision. They receive a salary or hourly wage, and they may be entitled to benefits like workers’ compensation, unemployment benefits, and health insurance, which independent contractors do not receive.
The History of the Independent Contractor Argument With Uber
A Transportation Network Company (TNC), commonly known as a “rideshare” company, is a service that uses software to connect drivers with passengers seeking a ride. Rideshare drivers use their personal vehicles to transport paying customers. Uber and Lyft are the most well-known TNCs in the United States, offering a quick, convenient, and easily accessible way to schedule rides through their apps.
However, when TNCs first emerged, a significant issue arose: rideshare drivers involved in car accidents were often unable to get their claims covered. Drivers would file claims with their personal auto insurance providers, but those claims were frequently denied due to exclusions in their policies, which don’t cover accidents while transporting paid passengers. In cases where Uber accident victims sought compensation, Uber denied responsibility, arguing that their drivers were independent contractors, not employees.
Caught in this legal gray area, accident victims had no clear path for compensation. To address this, states intervened, enacting laws to protect rideshare passengers and others injured in Uber and other rideshare-related accidents.
States Force Rideshare Companies to Provide Insurance
Legislators realized the dilemma Uber accident victims faced. Many states enacted laws requiring Uber and other rideshare companies to provide insurance coverage for their drivers. For example, Arizona enacted a law that requires transportation network companies to maintain minimum liability insurance coverage for their drivers. If the driver causes an accident, the victims can file claims with the insurance company.
Uber purchased insurance coverage for its drivers to comply with state law. The insurance coverage may exceed the state minimum requirements. Even though Uber drivers are independent contractors, the insurance covers them if they cause an accident.
According to Uber’s website, the company provides liability insurance to its drivers in the amount of:
- Coverage when the driver is offline: The driver’s personal insurance covers the driver. Uber does not provide insurance when the driver is offline.
- Coverage when the driver is online and available for a trip: Uber provides liability insurance of $50,000 per person and $100,000 per accident for bodily injury. It also provides $25,000 for property damage.
- Coverage when the driver is en route or on a trip: Uber provides liability insurance of at least $1 million for property damage and injuries to riders and third parties.
Liability insurance compensates accident victims for economic and non-economic damages. However, the victim must prove that the Uber driver caused the accident before Uber insurance will pay a claim. Furthermore, Uber’s insurance company will investigate the accident and may dispute that the Uber driver was at fault for causing the accident.
How Can an Employment Lawyer Help You After an Uber Accident?
An experienced employment lawyer can help you navigate the complexities of a claim, especially when the driver is classified as an independent contractor. Since Uber often denies responsibility for accidents involving its drivers, proving fault and securing compensation can be difficult. A skilled lawyer can investigate the accident, gather crucial evidence, and negotiate directly with Uber’s insurance provider on your behalf.
If you are an Uber driver facing legal challenges or need assistance with an accident claim, reaching out to an employment lawyer is equally important. They can provide you with the legal support needed to navigate potential disputes and protect your interests.