Accident with Ride Sharing Company or a Delivery Service: Uber/Rasier, LLC, Lyft, Door Dash, Uber Eats, Grub Hub, Post Mates?
Car accidents involving Uber and rideshare companies are increasing given the popularity of using such transportation for travelers. The pandemic has increased the use of such services especially in the realm of restaurant food home delivery. Plaintiffs in such matters may have cases that involve drivers, passengers, and pedestrians who may be hit by such drivers. There are a variety of issues that arise in such lawsuits.
The first hurdle is the mandatory arbitration clause that is contained in the application and agreement to accept using the service. Arbitration clauses are typically enforced as long as basic contract law is satisfied.
If enforced, such a provision eliminates a client’s right to the US Constitution’s 7th amendment of a right to a trial by jury, and can have major consequences to a victim’s right to compensation. Most attorneys would agree that a jury trial of their peers is the best way to achieve justice in a personal injury matter. These arbitration clauses have been heavily litigated throughout the country. The underlying issue is whether the clients have truly been informed of the clause and agree to it.
Nevada Judges have not enforced the provision in certain circumstances as knowledge of the hidden terms have not always been truly reviewed and agreed to despite clicking on the “I agree” button. This also has ramifications to passengers and others who may not have hailed the Uber, LLC, or Rasier, LLC (the local or State company that runs Uber), or Lyft. Given they do not often have the application on their phone, or were not the actual ride requestor, Courts are reluctant to enforce arbitration, but early on, did so liberally.
The second issue is whether, when fighting such entities, is whether the driver’s status as an independent contractor or employee, which can be an impediment to umbrella insurance coverage above the driver’s Uber policy which is typically a $1 million policy via vicarious liability. Such a move is a big deal when considering a Plaintiff’s damages—which may be well in excess of the primary policy of $1 million. Most Courts, including some in Nevada, follow the theory that, in fact, Uber drivers in Nevada are employees from a vicarious liability standpoint. This analysis is complex, but boils down to whether the employer, (i.e. Uber), controls the actions of the driver (employee).
For years, many legal scholars always deferred to independent contractors as those who were not controlled by their employers such that they could not control how a worker is to do a specific task, and is typically paid by the job (not hourly), and employment taxes not dealt with.Independent contractors such as cleaning services will do a job, for a fee, but not controlled from a standpoint of how the job is done, how fast, etc. Payment is made for the service.
Similarly, Uber has attempted to argue its drivers are independent contractors and not employees as they are not controlling the ride service. The Nevada Supreme Court in Rockwell vs. Budget Suites, 925 P.2d 1175 (1996), clarified the guidelines for whether a party is considered an employee or I.C. There, in the context of a security guard who was hired to patrol and police the Budget Suites apartments, but instead murdered a resident whom he had an affair with, the issue of his employment relationship was raised.
In analyzing the course and scope the Nevada Supreme Court stated, “This court has stated that “[t]he employer can be vicariously responsible only for the acts of his employees not someone else, and one way of establishing the employment relationship is to determine when the `employee’ is under the control of the `employer.’ ” National Convenience Stores v. Fantauzzi, 94 Nev. 655, 657, 584 P.2d 689, 691 (1978). “This element of control requires that the employer `have control and direction not only of the employment to which the contract relates but also of all of its details and the method of performing the work….'” Kennel v. Carson City School District, 738 F. Supp. 376, 378 (D.Nev.1990) (quoting 53 Am.Jur.2d Master and Servant § 2 (1970)).
However, in the situation where a property owner hires security personnel to protect his or her premises and patrons, that property owner has a personal and nondelegable duty to provide responsible security personnel. Therefore, we conclude as a matter of law that the security personnel are the employees of the property owner, even if the property owner engaged a third party to hire the security personnel. In such a situation, we find an employer-employee relationship without evaluating whether the security personnel were under the control of the property owner, noting that the control analysis is only one of the methods available to establish such a relationship.[4]National Convenience Stores, 94 Nev. at 657, 584 P.2d at 691.
In reaching this conclusion, we follow the ruling in Peachtree-Cain Co. v. McBee, 170 Ga.App. 38, 316 S.E.2d 9 (1984), aff’d, 254 Ga. 91, 327 S.E.2d 188 (1985). In Peachtree-Cain Co., the Peachtree Company owned a shopping center called the Peachtree Center. Peachtree Center Management Company, a separate corporation, managed the Peachtree Center and contracted with American Building Maintenance Company to provide and manage security personnel for the property. All of these parties were sued by a patron who claimed to have been falsely arrested by a security guard. Peachtree Company moved for summary judgment on the ground that it could not be liable for the intentional *1180 torts of the independent security agent. The court denied the motion for summary judgment, concluding that:
As owners of the Peachtree Center complex that had undertaken to obtain security services, their duty to their invitees to provide responsible agents was personal and non-delegable, and thus it did not matter that the owners had an additional filter, i.e., the Peachtree Center Management Company, between themselves and the actual security guard. Because that duty was personal and non-delegable, a recovery based upon a breach of that duty would not constitute imposition of liability without fault. To hold that the appellants are immune from vicarious liability in these cases would, as noted above, present “opportunities for gross injustice” which we will not here sanction.
Peachtree-Cain Co., 316 S.E.2d at 11 (citations omitted); see Zentko v. G.M. McKelvey Co., 88 N.E.2d 265, 268 (Ohio Ct.App.1948) (stating that where an owner of an operation or enterprise undertakes to obtain security services, the owner’s security duties are personal and nondelegable, and where the owner arranges for and accepts the services, the relationship of master and servant exists). Adams v. F.W. Woolworth Co., 144 Misc. 27, 257 N.Y.S. 776, 781 (App.Div.1932) (“A store owner who places a detective agency on his premises for the purpose of protecting his property by various means, including arrests, should not be immune from responsibility to an innocent victim of a false arrest made by the detective agency, even as an independent contractor.”); Dupree v. Piggly Wiggly Shop Rite Foods, Inc., 542 S.W.2d 882, 888 (Tex. Ct.App.1976) (“because of the `personal character’ of duties owed to the public by one adopting measures to protect his property, owners and operators of enterprises cannot, by securing special personnel through an independent contractor for the purposes of protecting property, obtain immunity from liability for at least the intentional torts of the protecting agency or its employees.”); see also Malvo v. J.C. Penney Company, Inc., 512 P.2d 575 (Alaska 1973); Noble v. Sears, Roebuck and Co., 33 Cal. App. 3d 654, 109 Cal. Rptr. 269, 274 (1973); Safeway Stores, Inc. v. Kelly, 448 A.2d 856, 861 n. 12 (D.C.1982) (recognizing the rule but not reaching the issue for other reasons); Hendricks v. Leslie Fay, Inc., 273 N.C. 59, 159 S.E.2d 362, 366-67 (1968); Moore v. Target Stores, Inc., 571 P.2d 1236, 1240 (Okla.Ct. App.1977).” …
“Similarly, in the instant case, Sun Harbor undertook to obtain security services, a personal and non-delegable duty, and it did not matter that the owners of Sun Harbor had an additional filter, i.e., Bigelow, between themselves and the actual security guard. Additionally, Sun Harbor arranged for and accepted the security services of Thamar, and therefore the relationship of master and servant (or employer-employee) existed between Sun Harbor and the security guards.”
Juxtaposed against Uber, Budget suites helps define the control requirements necessary to confirm employee status. Digging deeper into the business relationship of Uber and its drivers, the notion drivers are employees becomes pretty clear given the control eluded by Uber over its drivers.
Such facts such as: Uber’s Map Direction Requirements, non-negotiation of ride assignments, speed control technology, the pricing models that drivers often don’t control what they make, car requirements, driving is not a specialized trade (and only a driver’s license is required), length of employment, Uber’s normal business of transportation vs. (we are a tech company), and what many people don’t know—Uber’s leasing program.
Uber drivers typically have a $1 million dollar primary policy limit. Most do not know that Uber has nearly $200 million in umbrella coverage in layers of layers of protective coverage to protect this billion dollar business. The key to getting this additional coverage is bridging the gap to justice as often injured victims will be left without adequate compensation when their injuries are substantial.