Are Uber® and Lyft® Liable for Passengers' Accident Injuries?

Uber® and Lyft® liability for accident injuries is complicated by drivers' independent contractor status and the companies' terms of service.

While rideshare companies like Uber® and Lyft® offer some advantages over other forms of commercial transportation, they haven't gotten where they are without some controversy. The widespread popularity of these services has raised some key legal issues, including:

  • attempts to classify drivers as independent contractors instead of employees, and
  • liability of rideshare drivers (and of the companies themselves) for vehicle accidents and driver conduct.

Most civil lawsuits filed by passengers against Uber® and Lyft® (and/or against their drivers) don’t tend to feature the big verdicts or settlements that many other personal injury cases seem to generate. Two reasons for this include limited vicarious liability for the actions of rideshare drivers, and terms of service that limit the legal rights of passengers. If you're thinking about filing a passenger injury lawsuit against Uber® or Lyft®, it helps to understand the legal landscape.

Rideshare Companies, Vicarious Liability and Worker Classification

In the realm of personal injury liability for accidents and other misconduct, the theory of "vicarious liability" says that a "principal" (like an employer) can be legally responsible for the actions of its agents (employees, for example). As applied to rideshare personal injury lawsuits, that means companies like Uber® and Lyft might be liable if passengers get hurt because of a driver's negligent or intentional conduct.

The key here is that the wrongful behavior comes from a driver who is an employee, not an independent contractor. This distinction is important for many reasons, including taxes, worker rights, and workplace benefits. When it comes to personal injury lawsuits, the distinction can make the difference between a plaintiff making a full recovery for injuries or deciding not to sue at all. If a driver harms someone else, by causing a traffic accident, for example, Uber® and Lyft® can potentially avoid vicarious liability if the driver is classified as an independent contractor. (Note that both Uber® and Lyft® provide insurance coverage for traffic accidents involving their drivers. Learn more about rideshare passenger injury claims after a car accident.)

But perhaps the biggest single factor affecting personal injury lawsuits against Uber® and Lyft® is their terms of service.

Injury Liability and Uber®/Lyft® Terms of Service

By agreeing to use Uber® or Lyft®, passengers agree to the companies' terms of service, which serves as a contract between Uber® or Lyft® and the passenger.

Two very important provisions in the terms of service have to do with how Uber® and Lyft® will resolve any legal disagreement with passengers. The first provision concerns how and where legal actions can take place.

Subject to a few exceptions, any legal action a driver or passenger brings against Uber® or Lyft® must take place through binding arbitration. This means plaintiffs have:

  • no right to a public trial
  • no right to a jury, and
  • (for the most part) no right to an appeal.

The second provision bans any plaintiff from bringing a class action or other type of group or representative legal action. Unlike product liability or mass tort cases that may have tens of thousands of claimants, rideshare passengers have to bring suit against Uber® or Lyft® on an individual basis.

This is a huge advantage for Uber® and Lyft® because it limits the leverage that a group of plaintiffs can provide. Not being able to sue as a class can potentially lead to a smaller settlement or verdict. It also means plaintiffs cannot work together so their attorneys can pool their resources during litigation.

Then there’s the fact that when injured people sue as a group, it provides an incentive to others to join in the case. Often, individuals will be reluctant to sue if any potential award will be too small in relation to the financial costs of bringing the case. Because the costs of litigation for each class member in a class action lawsuit is far less than what a plaintiff would face in an individual lawsuit, class action lawsuits mean it’s easier to have prospective claimants decide to join.

Legal issues surrounding cases against rideshare companies are constantly evolving. If you've been injured in a traffic accident or some other incident while riding as a passenger in an Uber® and Lyft® vehicle, your best first step might be to discuss your situation with a lawyer. Get tips on finding the right lawyer for your Uber®/Lyft® passenger injury case.

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