Report from Bloomberg
In Brief – A federal court jury in Arizona has ordered Uber to pay $8.5 million in damages to a young woman who was allegedly raped by her driver in 2023. The decision marks the first time Uber, which has been fighting such claims for a decade, has lost a case at trial. With Uber facing nearly 3,000 similar lawsuits nationwide, the result raises the company’s financial exposure for harms caused by drivers, which industry analysts have estimated could reach $500 million. For years, Uber has successfully defended itself by arguing it cannot be held responsible for drivers’ actions because they are independent contractors, not employees. The plaintiff’s attorney said the decision validates thousands of survivors who have accused Uber of prioritizing profits over passenger safety. The company, which said it will appeal the ruling, noted that the jury rejected several plaintiff claims, including that the platform was negligent in its safety practices and that its app was defective, and did not award punitive damages.
Context – Uber has faced more legal and regulatory challenges than any other gig work platform. (AirBNB runner-up?) Most revolve around whether drivers should be treated as employees of the platform or independent people using the platform to earn money. The most prominent have involved labor advocates arguing that Uber skirts employment laws and required employee benefits. In the US, federal and state legislation has been stymied since California voters exempted gig-drivers from the state’s gig worker classification law in 2020, and while the Biden Administration expressed some interest in regulatory changes toward classifying gig workers as platform employees, the Trump Administration is not sympathetic. In the EU, while backers of the Platform Work Directive initially intended to set uniform gig worker employee classification standards, the final version left specifics largely in the hands of each member state, although on torts, the directive’s new rebuttable presumption of an employer-employee relationship for many gig work platforms could increase platform liability.