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Are Rideshare Drivers Independent Contractors or Employees?

With the rapid popularity of billion dollar rideshare companies, such as Uber and Lyft, many governmental agencies have struggled to enforce proper regulations. In recent years, rideshare companies have become a worldwide phenomenon, grossing over $11.3 billion dollars in 2018, but also discovering new controversies along the way. From sexual harassment cases to car accident settlements, Uber alone has paid out over $100 million in penalty charges.  

Among the plethora of lawsuits, perhaps the most debated is whether rideshare drivers should be considered as “employees” or “independent contractors.” Depending on the state, the difference between the two classifications can differ greatly, offering certain protections to the driver and limiting the company’s liabilities. 

If you were involved in an Uber or Lyft accident with a negligent rideshare driver, our skilled personal injury attorneys at West Coast Trial Lawyers will assess your case to determine what necessary steps should be taken in order to get you the compensation you deserve. 

To schedule a free consultation, you may reach out to our 24/7 legal team by calling 213-927-3700 or filling out our quick contact form.

Are California’s Uber and Lyft Drivers Employees or Independent Contractors?

In September of 2019, California Assembly Bill 5 (AB5) was passed. The purpose of AB5 was to redesign the rules of employment classification towards companies who hired a large number of gig workers, such as Uber and Lyft. As a result of AB5, workers who were previously identified as independent contractors were reclassified as employees. These employees were entitled to receive rights and benefits, such as minimum wage, overtime pay, workers’ compensation, and paid family leave. 

Uber and Lyft were not fond of this new law as it dramatically impacted the way they conducted their businesses. These two rideshare companies, along with DoorDash, introduced Prop 22 as a direct response to the AB5 Bill. Prop 22 was a ballot that excluded rideshare and food delivery drivers from being classified as employees.

After Uber and Lyft, along with other app-based services, spent more than $200 million in support of Prop 22, it was passed in November of 2020, thus classifying rideshare and food delivery drivers as independent contractors. However, Prop 22 was later declared unconstitutional. Uber and other app-based services announced their intent to appeal the ruling. The case is predicted to make its way to the state’s Supreme Court. Until a decision is made on whether Prop 22 should remain active, rideshare and food delivery drivers will continue to be identified as independent contractors. Due to the nature of independent contractors, Uber uses a “Rideshare Periods” tool to identify liability in the case of an accident.

Employee vs Independent Contractor 

Regardless of the job duties or pay scale, a company may choose to classify a worker as an “independent contractor” or as an “employee.” Though this may not affect the specific job requirements, the distinction between the two is very different in the eyes of the law. Companies that hire employees are responsible for the delegation of social security, income tax, and Medicare. Independent contractors, however, are tasked with their own devices and are mostly exempt from labor laws. 

How to Distinguish Between an Employee and an Independent Contractor?  

When the courts are determining whether a worker is an employee or an independent contractor, they will consider the following:

  • Is the company in direct control of the worker’s daily duties?
  • Is the company supplying tools, reimbursements, and flexible payment   plans?
  • Does the company provide employee benefits, insurance plans, pensions, or paid vacations and sick days?
  • Is the job a key aspect of the business?

Tort Law Liability

The court defines tort as an error a worker makes that causes physical damage or personal injury to another person, whether purposely or because of negligence. The tortfeasor, or person who is responsible for the violation, is liable for a victim’s compensation. This can include, but is not limited to, pain and suffering, emotional distress, and the violation of personal rights. 

Liability for Independent Contractors 

Generally speaking, most states do not accept responsibility for the negligence of their independent contractors. It is understood that an independent contractor acts separately from the company and, therefore, is personally at-fault for any wrongdoings that may occur. However, as tort laws continue to evolve, the lines of responsibility begin to blur.        

Liability for Employees 

If a worker is considered an employee, then any mishaps that occur while the employee is working may fall back on the employer. This includes, but is not limited to, misconduct, carelessness, or honest missteps. 

Whenever someone is injured or if personal property is damaged, the law considers this to be a “risk of business,” and the employer must take appropriate actions to rectify the situation. 

California Tort Law 

It is no surprise that the progressive state of California has a unique set of regulations when it comes to tort law. When compared to other states, California courts consider the following unique points: 

  • California Tort Claims Act
  • Medical Injury Compensation Reform Act 
  • Evidence Guidelines
  • Comparative Negligence 

West Coast Trial Lawyers Is Here to Help

When someone else’s negligence is the main factor of your Uber or Lyft accident, you will be given the right to file a lawsuit against that party. A skilled Uber and Lyft Accident lawyer at West Coast Trial Lawyers is available 24/7 to provide legal assistance. We will help you recover maximum compensation for your losses.

Our personal injury law firm proudly offers no-cost, risk-free consultations to Uber and Lyft accident victims. Contact us today by calling 213-927-3700 or completing our contact form to claim yours today.


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