Uber Liable as an Employer? Lawsuit Against Popular App Could Test the Bounds of Legal Accountability in the Digital Age

February 4, 2014

On New Year’s Eve, six year old Sofia Liu, her four year old brother, and her mother were crossing a San Francisco street when they were struck by a car running a red light. Sofia was killed instantly, while her brother and mother were seriously injured. While this tragic story has also raised questions about pedestrian safety in general in San Francisco—a city that suffered 21 pedestrian fatalities in 2013 alone—Sofia’s death has attracted national attention due to a wrongful death lawsuit filed against the driver’s employer, Uber. Uber is a venture funded mobile business founded in San Francisco that created a phone application to connect passengers with vehicles for hire.  While the driver, Syed Muzzafar, has also been charged with vehicular manslaughter, this suit is one of the first to determine whether using peer to peer technology and applications can deem a user an employee, therefore creating employer liability for the app creator.

This suit is one of the first to determine whether using peer to peer technology and applications can deem a user an employee, therefore creating employer liability for the app creator.

Originally founded as a way to allow limo drivers who were in between scheduled jobs to connect with individuals who wanted a ride at the touch of a button, Uber’s popularity has exploded over the past twelve months, with the service now available in major cities across the country and Uber starting its own ride sharing program to compete with the likes of Lyft and Sidecar. With this surge in popularity, Uber has also suffered its share of public relations fiascos, including controversies over exorbitant “surge” charging of customers and seemingly inappropriate customer service emails between CEO Travis Kalanick and Uber users. Yet those issues pale in comparison to the wrongful death suit filed by Sofia’s mother, who demands damages for negligence, infliction of emotional distress, products liability, and wrongful hiring and supervision.
Soon after the accident, the second accident involving a car listed on the Uber application, Uber terminated Mr. Muzzafar’s application privileges, claimed that Mr. Muzzafar was not on the job for Uber, en route for a job sent by the Uber app, or using his app to find possible fares. Additionally, Uber claims that Mr. Muzzafar was merely a contractor and not an actual employee of the company. Finally, in its contracts with drivers, Uber claims that its insurance should only be liable when the driver is currently transporting a passenger. Their rationale that the majority of its drivers already have insurance through their traditional employers that provided their commercial license is clearly an enormous loophole that would not protect other drivers or pedestrians when an Uber driver is on the job, or anyone on the road when the Uber driver is merely in between fares. Additionally, this defense is also irrelevant to the growing ride-sharing programs of Uber and other organizations that do not use “professional” drivers.
The outcome of the suit may come down to what the Uber application itself says. When a rider requests transport, the app does not indicate that the drivers in the area are independent transportation providers from different companies, but Uber drivers with Uber affiliation. This distinction is what the suit is built upon and a ruling in Sofia’s family’s favor could have consequences beyond the transportation industry. Would AirBnb, a website that allows individuals to rent unoccupied living space and other short-term lodging to guests, be liable if the host or renter engaged in criminal activity? Would users of TaskRabbit, an app that allows individuals with out of control to-do lists to charter out any and all of their work to individuals, be able to sue TaskRabbit itself for breaking a contract? As courts begin to wrestle with these questions and many like it, these growing peer-to-peer companies may find themselves dealing with a host of problems they never considered as a small startup.