Legal Exposure Of Uber For Its Drivers Conduct
Gig Economy
Uber is a leader in the sharing economy where companies are providing services on demand. The services providing companies may have employees or contractors. Uber drivers, for example, are not employees of Uber Company; instead, they are independent drivers. However, as it creates new types of entrepreneurship for people, it raises a host of legal questions for companies that revolve around agency law.
Principles of relationship
Uber drivers are independent contractors meaning that the drivers work for and receive payments from uber (Loewenstein, 2016). However, Uber has no control over the working conditions and methods of the drivers, and Uber company is not liable for the drivers’ acts and omissions. The principles guiding the relationships include:
The principle of actual express authority, which is the authority given to an agent by the principal through express conduct or statements, or implied via reasonable inferences (Fields & Cheeseman, 2016). For example, Uber gets into an explicit contract with drivers to take action on behalf of Uber when they pick and drop passengers.
Apparent authority principle is when a third party (uber customers) believes that a company or a person is the agent (Uber drivers) and is acting on behalf of the principal (Uber company). When uber customers call for a driver, they assume that the driver is acting on behalf of the Uber company.
Case sample
If an Uber driver lost control and killed his passengers under the influence of alcohol, Uber is not to be liable for the conduct of its driver. The law of agency holds that the principal is not responsible for the torts of an independent contractor unless the conditions are inherently non-delegatable, illegal, dangerous, or a situation that is impossible to separate from the principal. In this case, the Uber driver engaged independently in a crime. The law provides that the A principal is not liable to a crime committed by an agent if the agent undertook the crime alone. Drunk driving is a criminal activity, and Uber ethics states that a driver should not work while under the influence of alcohol or drugs.
Steps that Uber should undertake to limit legal exposure for its drivers
Uber can make three broad strategies as steps to limit the exposure of its drivers. For the uber company, there is a need to buy insurance policies for all insurable risks (Dolgin, 2019). Uber, in this case, can purchase general insurance policies covering risks such as accidents, passenger and driver injuries, damage of passengers, and so forth. Uber Company has emphasized on the importance of insurance and has purchased covers for its drivers in some countries. The insurance policy taken out by Uber management provides cover for third-party accidents.
Uber should focus on developing ethics and code of conduct that must be adhered to by the drivers. While the code of conduct of a company might not apply in a court of law, a company can use the means to eliminate drivers who can put the company in legal exposure. The code of conduct and ethics stipulates in detail how drivers are supposed to act at all times.
Developing general contract terms between the uber and the drivers (Dolgin, 2019). Uber Company must create a contract that addresses all legal boundaries that the drivers know the extent to which they should act while representing Uber. The agreement should address the principal-agent relationship and all drivers’ torts that are the responsibility of the driver. Uber company can also develop a constitution that guide the uber relationship with its drivers.