The family of a 6-year-old girl killed when she was struck in a crosswalk by a car settled a wrongful death lawsuit against the popular “ridesharing” service Uber. According to the lawsuit, the driver was logged into the smartphone app for “Uber X”-a “peer-to-peer” version of the service-indicating that he was available to pick up passengers. The terms of the settlement are confidential.
In the lawsuit, filed in January 2014, the family alleged that, by using the app while driving, the driver was in violation of a California laws prohibiting driving while using a cell phone or operating an “electronic wireless communications device.” The family alleged that Uber was liable both because it knowingly allowed and encouraged drivers to violate the law by using the app and because it failed to properly hire, supervise, and train its drivers.
Uber, for its part, denies that Uber drivers are its employees and that it is liable for their conduct. Despite the fact that Uber, recently valued as a $40 billion company, collects payment from passengers in exchange for on-demand transportation, Uber’s terms of service states that it “does not provide transportation services” and “is not a transportation carrier.” Taxi companies typically use a similar tactic to avoid liability for their drivers’ accidents, claiming that drivers are “independent contractors.”
Uber and other “ridesharing” services, such as Lyft, were recently in the news in Houston, receiving approval from the city council to operate after a long political and legal battle, in which fears regarding Uber drivers’ qualifications and insurance coverage were prominent. As part of the deal, the city imposed strict licensing requirements, including criminal background checks. The ridesharing service, called a “transportation network” in the city ordinance, is also required to provide $1 million in liability insurance coverage for drivers from the time the driver is matched up with the passenger to the time the passenger is dropped off at the destination. The network is also required to provide liability insurance for any time the driver is logged into the app, albeit for a lower amount.
Uber was already in compliance with the insurance requirement, which was modeled on other cities’ ordinances. Lyft, however, chose to cease operating in Houston rather than comply with the criminal background check requirements.
Uber’s compliance with the background check requirement does not appear to have been perfect: a Houston Uber driver was recently charged with sexually assaulting a passenger. The driver was active with Uber, but according to the city had never applied for a city license and had never undergone a city background check. Uber claimed that the driver had passed its own background check, despite the fact that the driver had previously served 14 years in federal prison for conspiracy to possess with intent to distribute cocaine.