Legal

Uber Faces Millions In Liabilities If Drivers Become Employees

A 2017 deposition is giving insight into Uber‘s legal strategy when fighting back against driver-related lawsuits.

Legal documents related to an Atlanta civil suit, Jessicka Harris v. Uber, viewed by The Washington Post, have shown how the ridesharing giant uses its drivers’ contractor status to fight off these lawsuits. During a nearly three-hour deposition, Uber General Manager Nicholas Valentino — then an operations manager in Atlanta — refused to call the company’s contractors “drivers.”

“They are not Uber drivers,” Valentino said. “They’re independent third-party transportation providers.”

He repeated the claim no fewer than 16 times. In fact, the company’s attorneys and executives argued during the case that Uber is simply a marketplace used for arranging transportation.

The distinction is an important one for Uber, which faces numerous lawsuits each year related to everything from accidents to wage disputes. In the Harris case, the plaintiff sued Uber and driver Robert Ferguson, alleging that she nearly lost her leg after being struck by Ferguson.

During the case, Valentino was asked if he knew how many Uber drivers were in Georgia.

“Zero, would be how many Uber drivers, because that’s not what they are,” he said. “But, if you are asking about independent third-party transportation providers (not trying to be difficult), I would say, no, I don’t know the answer.”

“Isn’t it true that Uber drivers like Mr. Ferguson are commanded to transport the Uber customer directly to their specified destination?” asked the plaintiff’s attorney.

“He is not an Uber driver,” said Valentino. “Independent third-party transportation provider.”

However, a bill in California, AB5, aims to require Uber to reclassify its drivers as employees, and give them benefits, including paid sick leave. If passed, AB5 would also expose the company to new liabilities.

“Liability is one of the big unspoken-about issues here,” said State Assemblywoman Lorena Gonzalez, who wrote the bill. “We want to ensure there’s responsibility at the end of the day, and that they are not just passing that along to someone else.”

It’s not surprising that Uber is fighting the bill, with company spokesman Noah Edwardsen explaining that “liability for safety incidents has simply never been part of [Uber’s] arguments or strategy around AB5,” and that “suggesting otherwise is wrong.”

Seattle University Law Professor Charlotte Garden said the California bill could be copied in other states, forcing Uber — and other gig economy companies — to come up with different ways to classify its business.

“It’s part of Uber’s playbook to use colorful language to obscure the true nature of their business,” said Garden.

——————————–

Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. In the November 2019 Mobile Order-Ahead Report, PYMNTS talks with Dan Wheeler, Wahlburgers’ SVP, on how the QSR balances security and seamlessness to secure its recently launched WahlClub loyalty program.

TRENDING RIGHT NOW