Rideshare Drivers and Workers’ Compensation

Whether a worker is considered to be an employee or an independent contractor has many consequences. One of the most important is whether the worker will be covered by workers’ compensation insurance in the event of an injury sustained while working.

If a covered employee is injured on the job, he or she can recover damages from workers’ compensation, and is prohibited from filing a lawsuit against the employer. Workers’ compensation is a no-fault system, so the employee does not have to show that the employer’s wrongdoing caused the injury. If a worker sues the employer for a personal injury, however, he or she must show that the employer was negligent or otherwise at fault. Personal injury suits may also recover damages beyond those available under workers' compensation.

In California, employers are required to purchase workers’ compensation insurance for their employees. But they are not required to do so for any independent contractors they hire. There are a variety of tests under California law to determine whether a worker is an employee or independent contractor, but they all focus on how much control the company exercises over the worker. Some key factors to consider are whether the company can control the manner in which the work is done, who provides the materials for the job, and whether the work is essential to the company’s business.

For rideshare companies, determining whether drivers are employees or independent contractors is a tricky issue. Drivers use their own vehicles, pay for their own gas, are free to work for other companies (e.g. for both Uber and Lyft), set their own hours, and work as much or as little as they want. The rideshare company’s biggest contribution is providing the app that forms the basis of the service—the company is not a transportation company, but rather a software company.

But drivers argue that they are told how much to charge for each ride, and that they have to follow certain rules or risk termination. Importantly, the drivers are integral to the business. Without the drivers, the rideshare company could not function. Additionally, traditional cab services must provide their drivers with workers’ compensation insurance.

If a rideshare driver is injured while on the job, currently they do not get workers’ compensation. This means that a driver's only means for financial recovery is a personal injury lawsuit. He or she may bring action against the person responsible for his or her injuries in pursuit of damages.

There are multiple lawsuits pending about whether rideshare drivers are employees or independent contractors. A class action lawsuit pending in the Superior Court of California in San Francisco may resolve the issue. In this suit, an Uber driver was injured by a passenger’s attack, and is suing for workers’ compensation coverage. There is also a separate lawsuit in federal court in San Francisco, in which rideshare drivers are seeking to be classified as employees.

If you have been injured at work but are not covered by workers' compensation, a third-party lawsuit may provide your only avenue for recovery. Please contact the passionate San Jose workplace injury attorneys at Corsiglia, McMahon & Allard, L.L.P. for a free consultation at (408) 289-1417.