Uber drivers might not be considered employees by Uber, but rather independent contractors. Like many disrupter companies, Uber has very little interest in following the workers’ compensation laws in the States that they operate so that they can save money. This is important to Uber since they lose hundreds of millions of dollars each year as they increase the reach of their business across the globe. This isn’t surprising considering that Uber has sought to upend many of the state and local regulations regarding taxi and chauffer licensing. They certainly don’t want to pay health care insurance for their drivers either. When people think of Uber, they usually don’t think about layers of companies that make a company like it. Uber prefers to attempt to dictate what the law should be for their benefit by hiding beyond their wholly-owned subsidiary Raiser, LLC. Uber is protected through direct litigation because of Raiser LLC. By doing so, Uber claims that when one of their drivers gets hurt while on ridesharing duties are not employees. While this would have most people scratching their heads, in in places like Chicago, Illinois, the laws seem much clearer in establishing that Uber drivers are indeed employees while transporting or driving to transport passengers. What is clear is that Raiser is not associated with Lyft and Lyft is not associated with Uber.
In all likelihood, most people who aren’t working for Uber don’t realize it, but Raiser, LLC pays the Uber drivers for their rideshare fees. Basically, Uber collects the money and Raiser pays the drivers. By doing this, Uber claims that it doesn’t directly employ the drivers. At the end of the day, Raiser basically cuts the driver their checks by sending funds to a driver’s bank account. Then, once per year, Raiser sends the drivers a 1099 tax form for work as an independent contractor. When a driver has an issue with Uber, the driver has to take it up with Raiser, which acts as a protective shield or intermediary for Uber where the drivers will be coldly directed to “Terms and Conditions” to deal with their concerns. In issues involving workers’ compensation, the major concern for an arbitrator or commissioner is evaluating direction and control. If someone exercises a certain amount of control over the way in which another person does the job duties, then an employee-employer relationship is established. Most employers like to avoid employment relationships for liability and tax reasons, but their avoidance sometimes backfires. Ironically, in a personal injury situation, Uber seems to clearly be in an agency relationship with the driver while the driver is picking-up and dropping-off passengers. It certainly seems to be hypocritical to have drivers acting as agents of Uber, but then when those agents are hurt during agency, Uber will not provide the basics of a claim like providing disability checks or paying for medical bills.
Although drivers must use Uber’s app for picking-up and dropping-off passengers, Uber claims that they simply don’t employ the drivers when they are hurt during that software-driven, nearly automated process. Clearly, without the app, Uber drivers wouldn’t be able to do their job. Further, the app provides a medium of communication for the Uber drivers and potential customers as well as a portal between the drivers and Uber. To say that Uber doesn’t control its drivers certainly seems to be contrary to the daily functions of a driver using Uber’s app. While Raiser LLC is liable for any rideshare accident that happens at Uber, when someone makes a claim against Uber, the claim would also be against Raiser, LLC. Legally, Uber drivers are borrowed employees of Raiser LLC or the subsidiary Uber uses in the Chicago market. As far as Uber is concerned, drivers don’t work for them even though they use their app continually and display the brand name clearly.
When making decisions regarding a work injury sustained while driving for Lyft or Uber or a car accident involving Lyft or Uber, it is wise to consult an attorney to protect your interests because it is clear that Uber and Lyft already have. If you or someone you know works for Uber or Lyft and has suffered injury due to a motor vehicle crash or if someone was hurt while merely using Uber or Lyft to rideshare, the attorneys and staff at Katz Friedman are here to help with the complexities of obtaining proper compensation.