Is Uber Liable for Its Drivers’ Accidents?

The general rule in personal injury cases is that an employer is responsible for the negligence of its employees while they are engaged in work-related activities. So, if a taxi driver or a limousine operator causes an accident, the company is liable. However, ridesharing services such as Uber, Lyft and Sidecar have been able to define their drivers as independent contractors, not employees, so the old principle of respondeat superior, meaning, “let the master answer,” may not apply.

Rideshare drivers enjoy significant freedom to set their own hours and choose the area in which they want to work. There is very little supervision from the company; workers provide their own cars and are responsible for their own taxes. Drivers are not covered by workers’ compensation. All of these facts have led courts across the country to conclude that rideshare drivers are free agents.

But all this does not mean that the rideshare driver is left to his or her own devices. For example, Uber’s commercial liability insurance covers its drivers for auto accidents from the point they log onto the company’s system to accept passengers. This was not always the case. In 2013, Uber’s insurance only covered drivers when they were serving an Uber customer. That changed when 57-year-old Uber driver Syed Muzaffar, who had a record of reckless driving, struck several pedestrians in a crosswalk, severely injuring two and killing 6-year-old Sophia Lui. Uber denied liability, but under public pressure, changed its policy to provide contingent insurance, if the driver’s own policy refuses to pay.

However, what if there were another accident of the type that killed Sophia Lui? What if the losses exceeded the company’s coverage for a single accident? Once the commercial policy has reached its limits, where can the plaintiff(s) turn for compensation?

Since Uber is a worldwide, multibillion-dollar company, it would be nice from the plaintiff’s point of view to be able to attach Uber, the company, as a defendant in any lawsuit. Then the company would have to satisfy any remaining part of the judgment from its assets. It is unlikely that many Uber drivers, who earn only slightly more than minimum wage once they deduct expenses, would have sufficient assets to satisfy a large judgment.

Seigel Law represents victims of car crashes in Bergen County and throughout New Jersey. Contact us online or call 201.444.4000 today for a free consultation and case evaluation.

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