Although it may seem simple to work as an Uber or Lyft driver in California, they are often faced with tricky legal issues. Many drivers will have experienced litigation regarding employment classification, wage rights, or entitlement to benefits. There can be confusion about insurance coverage; what claims can be pursued, and whether the driver in question is complying with the state’s regulations. As a driver, if someone wants to protect themselves in a rapidly changing environment, it is essential to be aware of common legal pitfalls they could experience.
- Employment Classification Issues
For injured victims of rideshare accidents, one of the most contentious issues is whether drivers for Uber and Lyft can be considered independent contractors or employees. By classifying drivers as independent contractors, rideshare companies have reduced their legal responsibility for benefits, wages, and expense reimbursement. California has repeatedly challenged this model by pushing for broader employer accountability.
- Wage & Hour Issues
The State of California Labor Commissioner and California Attorney General sued Uber and Lyft, alleging the companies deprived their drivers of all wages and overtime pay. Numerous drivers state they work extended hours for less than minimum wage. There have been multiple legal cases to pay drivers and settle claims retroactively, but the legal landscape is still highly unpredictable as legal statutes change frequently and companies develop policies to avoid being held accountable.
- Accidents and Insurance Issues
Accidents create difficult and tricky liability issues and potential compensation claims. California law stipulates specific insurance requirements, and Uber and Lyft are specifically required to have substantial insurance policies only when the driver is actually on the way to a pick-up or has a passenger in the car. Let’s say the driver is merely waiting for a ride request when an accident occurs. In that case, they must typically rely on their personal insurance policy or limited contingent coverage provided by the rideshare company.
- Risks to Passengers and Public
Drivers do go through a fair amount of background checks and zero tolerance policies for driving under the influence. Legal cases about passengers being assaulted, multiple types of unsafe driving behavior, or drivers being attacked by unruly passengers are making headlines. Even if drivers attempt to defend their actions, they may be forced to do so without company support. Every day in California courts, there are criminal claims of harm to passengers and potential company liabilities that are litigated.
- Deactivation and Access to Work
Drivers can be ‘deactivated,’ or removed from the app entirely, with little or no warning or explanation. Being cut off this way can eliminate a driver’s entire income with little notice. Complaints have prompted state-level legislative discussions about improving transparency and creating an appeals process.
New laws related to the potential for these app-based workers to unionize in the future will alter how these processes are handled through their action or inaction. Still, as it stands, it places the driver in a tenuous position if they are being accused of being “unfit” drivers, or having inevitable breaches in platform rules as conduct.
Key Takeaways
- Driver classification is the most important legal issue, and the most controversial, with implications on pay and benefits.
- Many aspects of wage claims are affected, including minimum wage and reimbursements.
- Accidents involve complex insurance coverage issues or claims, which are often hotly contested.
- Passenger safety issues have caused legal issues and courts have attempted to rectify these problems through reform.
- The deactivation of drivers directly threatens their livelihoods and has been evaluated at the legislative level.
