Santa Clara University School of Law professor Robert Peterson has authored an editorial for Insurance Thought Leadership. It was later featured in Insurance Thought Leadership’s Six Things newsletter.
In his piece, “New Questions for Uber and Lyft,” Professor Peterson examines the worker’s rights issues surrounding whether transportation network companies (TNCs) including Lyft and Uber can treat their drivers as employees or independent contractors.
Apart from these added expenses, status as an employee creates some difficult insurance challenges. Here a few:
–If you write a workers’ compensation policy for the TNC’s employees, how many employees are you insuring? Only those who work in the office, or the hundreds or thousands of drivers on the road?
–Most statutes or regulations covering TNCs such as Uber and Lyft require them to carry insurance on their drivers in various amounts — e.g., $1 million from the time of agreeing on a ride to after the dropoff. Usually, there is a lower amount required for the time the driver is cruising with the app on looking to connect with a fare ($50,000 primary and $200,000 “excess” in California). If the driver is an employee, these limits become largely irrelevant because the TNC, as the employer, is liable without limit for any injuries caused by an employee driving within the scope of employment. Put another way, the injuries are backed by all of the TNC’s assets, including any insurance it may carry.
–But the issue is more complex than that. What if the driver has a collision on the way to the city, but before turning on the app? Usually, when one is going to or coming from work, the commute is not considered to be in the scope of employment – i.e., no liability on the part of the employer. This “going and coming” rule changes, however, when the employee must use her car in the work. Obviously, TNC drivers must use their cars.
The full article is available at Insurance Thought Leadership.
