Uber and LYFT settlement with NY AG

The gig economy is characterized by short-term, independent work arrangements, where individuals take on tasks, projects, or assignments as freelancers or temporary workers. While the variants seemingly increase by the day, the underlying concept remains the same; a tech company develops an “App” which links those looking for a product or service with “gig-economy worker” who provides the service.   Amongst numerous upstarts in the market, tech giants such as Uber, LYFT, Grubhub, Doordash, Instacart, and Amazon cast a long shadow over the gig-economy landscape. 

 In New York the legal classification of gig-workers has been a question of intense legal and political debate.  The tech companies argue that the workers using their App are independent contractors and not employees.   As such, in New York personal injury lawsuits these companies argue that they are not legally responsible for the negligent actions of the workers or the accidents they cause.  Those injured are often confused as to who will be held responsible for the injury and damages that they have sustained as a result of a rideshare or gig-economy accident.  Questions like, “Whose insurance covers a rideshare accident?” or “Is Uber responsible for injuries caused by a Uber driver?" or similar variants such as, “Is the tech company responsible when i get hurt by one of its app-based workers?” are commonly fielded by attorneys handling New York personal injury cases.  Unfortunately, to many involved in this area of personal injury law and to those following the rapidly developing legislation and caselaw on the issue, its seems that the confusion will only intensify after the New York attorney general’s recent lawsuit settlement with gig-economy giant Uber. 

 On November 2, 2023, Uber and LYFT agreed to pay a combined $328 million to settle claims by New York’s attorney general alleging wage theft.  The attorney general’s investigation centered on claims that Uber and Lyft improperly collected certain taxes and fees from their drivers rather than the passengers from whom they should have been collecting the money.  The probe arose from concerns raised by the New York Taxi Workers Alliance, which represents about 21,000 yellow taxis, green cabs, app-based, livery, and black car drivers.    In settling the matter with Uber and LYFT, the attorney general announced that in addition to being reimbursed a portion of those taxes and fees, Uber and LYFT drivers will also earn the right to guaranteed hourly rates, paid sick leave,  notices, and in-app support pertaining to questions related to earnings and various work conditions.  Under the settlement, drivers outside of New York City will receive a minimum of $26 per hour while on rides, a rate which is already in effect in New York City due to Taxi and Limousine Commission regulations.  In a separate settlement announced on the same day, Uber came to an agreement with the New York State Department of Labor to begin making payments to a state insurance fund designed to provide unemployed Uber drivers with benefits. 

 While these newfound rights and privileges appear at first to be well deserved and a welcome step towards recognizing gig-economy workers as employees, a footnote in the attorney general’s settlement is concerning.  After a $290 million dollar settlement with UBER and a $38 million settlement with LYFT, the New York attorney general also agreed to end its probe into Uber and LYFT’s classification of drivers as independent contractors instead of employees. This classification of rideshare drivers as independent contractors is an issue that both companies frequently battle out in courthouses, legislatures, and ballot boxes throughout the country.  Uber and LYFT have both denied any wrongdoing and have called the settlement a “win” for drivers, with their publicly traded stocks surging after announcement of the settlement.  In a statement after the settlement, Uber noted that the agreement “helps put to rest” the classification issue and will be a model for other states.  

While the attorney general’s settlement may have put to rest the issue from an investigative standpoint, from a personal injury perspective, the elephant in the room remains, what happens when the gig-economy worker does something wrong?  What happens when, in the course of carrying out their duties, a rideshare driver injures somebody in a car accident?  Whether a rideshare car accident or a delivery person acting negligently, the question that will undoubtedly continue to be fought in courthouses throughout New York State will be: when are the actions of the “gig-worker “attributable to the multi-million or billion dollar tech company operating the app?

Lawyers representing those injured in accidents caused by gig-economy workers will continue to argue that the tech companies are vicariously liable for the actions of the gig workers and rideshare drivers.  Vicarious Liability, a complex legal concept with many nuances , concerns the question of whether a person or company can be held legally responsible for the acts or omissions of another person or entity.  One type of vicarious liability is based on the theory of Respondeat Superior, which in its simplest form, boils down to whether the superior is responsible for the acts of subordinates. In cases involving gig-economy workers and rideshare drivers, attorneys representing injured victims will continue to look not only to the individual who directly caused the accident but also the company on whose behalf that worker was acting at the time of the accident.  

These cases are hotly contested, and the issue of whether these workers are classified as independent contractors or employees is rapidly changing and can impact the chances of success in a personal injury case.  As an attorney who has handled many of these cases against most of the players in the industry, it is important to stay up to date not only on the App-based technology involved but also on the legal, legislative, and now investigative decisions rapidly coming down around the country.  Those decisions guide how I prosecute “gig-economy worker” cases and they serve as the blueprint for how I approach discovery and depositions in rideshare and gig-economy cases.  Through a thorough understanding of the App at issue, familiarity with the companies policies, rules and regulations, and a command of the rapidly evolving case law and regulatory guidelines on the issue, it is possible to extract concessions and information during the lawsuit discovery process that will support and buttress the plaintiff’s argument that these companies should be held responsible for the actions of the “gig-workers” who carry out their business. 

While a welcome win for gig workers acting as Uber and Lyft drivers, the attorney general's settlement with Uber and LYFT will undoubtedly ensure that plaintiff lawyers will need to continue to fight tooth and nail to develop these cases in a manner that puts our clients in the best position to overcome the independent contractor defense.  Through hard fought battles, we have found that the best way to handle these “gig-economy” and rideshare cases is to go on the offensive, early and often, and to continue pushing until we have enough ammunition to convince a jury that these workers are employees and not independent contractors.  While the facts and circumstances may differ in individual cases, at the end of the day, our overarching legal argument boils down to the fact that these companies dominate every aspect of the gig-workers means and methods of work. 

If you have been involved in an accident involving rideshare, a courier or a delivery service, or if you have been involved in an incident where one of these App-based tech companies may have been involved, such as a black-car crash, an incident or altercation with a delivery person or a car accident with a delivery vehicle or a personal vehicle being used to deliver goods, we urge you to contact us so we can aggressively being building your case. Rideshare accidents have many unique aspects and we encourage you to reach out to experienced counsel in this area to guide you through the the initial questions you may have such as who is responsible when an Uber driver or gig-economy worker gets in a car accident.