According to Uber’s website, “Uber is a technology company that has developed an app that connects users (riders) with third party transportation providers.” Consistent with that statement, Uber does legally operate in the United States as Uber Technologies, Inc. Like most things in life, there is much more than meets the eye. When we look below the surface, it is apparent that Uber is not necessarily the entity most people think it is. Before reading the statement above from Uber’s website, an average person would have equated Uber with an everyday taxi company or even a chauffeur/livery service. Whereas riders might be a bit confused about who Uber is, the people that drive for Uber are probably even more confused because Uber is not the entity paying them.
As it turns out, Uber drivers are paid by and given IRS 1099 forms from Rasier LLC or Rasier–CA LLC, which are just subsidiaries of Uber Technologies, Inc. Although Uber’s corporate structure is somewhat complicated, the goal in creating entities that only encourage legal battles is nothing new for Uber. In fact, despite California recently passing legislation to protect drivers who are injured on the job, Uber will not treat their drivers as employees there or anywhere, including all of their drivers in places like Chicago, Illinois. Presumably, Lyft will follow suit even though Lyft, Inc. does not have a subsidiary quite like Uber’s use of Rasier. Lyft just provides its drives with an IRS 1099 form. Uber continues to claim that they are merely a technology platform. While drivers and riders alike would find Uber’s position curious at best, lawmakers are trying to stop Uber from gaming the system and passing the costs of work injuries to others including state governments. Unfortunately in Illinois, there is no legislation categorizing Uber, Lyft, or any ridesharing company as an employer when it comes to their drivers. That would mean that rideshare companies must provider workers compensation coverage for the drivers. This varies drastically from a taxi driver’s situation when he or she is hurt on the job. However, since Lyft and Uber claim that they have no employment relationship with their drivers, an injured rideshare driver should expect no assistance from these companies to cover skyrocketing medical and disability costs. For the most part, when a rideshare driver is hurt in a car accident, that driver needs to obtain their own attorney to fight these companies to get workers’ compensation benefits. On top of this, injured drivers may need an attorney to help them obtain compensation when an at fault driver causes them injuries in a crash.
Unlike the situations that rideshare drivers find themselves when they are hurt driving for Lyft or Uber, when a person is injured in a crash as an Uber or Lyft passenger or when a person is injured by an Uber or Lyft driver, the ridesharing companies carry liability insurance. Not only do these companies carry insurance for when they are at fault, these companies carry insurance for when another at fault vehicle does not have enough coverage. In fact, Lyft used to use to York Risk Services, Inc. to insure their drivers for the harms and losses they cause and to provide underinsured and uninsured coverage. But now Lyft has The Travelers Companies covering their negligence and the negligence of their drivers. Lyft’s coverage with The Travelers Companies also includes underinsured and uninsured coverage for drivers and passengers. Uber used to use James River Group Holdings to insure their drivers for the harms and losses they cause and to provider underinsured and uninsured coverage. But now Uber has Allstate covering their negligence and the negligence of their drivers. Allstate also covers their drivers and passengers for underinsured and uninsured situations.
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 and that the situation can get very complex. 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.