Is Uber Liable When Drivers Sexually Abuse Passengers? (Forbes Cross-Post)
Uber allegedly has over 300,000 drivers. In a population that large, inevitably some bad apples will do stupid or illegal things. Uber tries to curb such behavior by doing background investigations (which it has also been sued for) and removing rogue drivers. Even so, drivers will still commit crimes against passengers, and the victims will seek to hold Uber accountable for those crimes. Can they? In two cases involving drivers who sexually abused passengers, a federal court indicated that they might.
Much of the plaintiffs’ case revolves around the now-familiar question of whether Uber drivers are employees. A year ago, a federal judge said drivers could be employees but deferred a final resolution to scrutinize the issue more closely. Unfortunately, that subsequent scrutiny won’t take place because Uber preliminarily settled the case without definitively resolving the open legal questions. As a result, we still don’t know if and when Uber drivers are employees.
Faced with this unresolved issue, the judge in the sexual abuse case chose to punt the drivers-as-employees question for later. Still, even if drivers are employees, the plaintiffs will have to show that the drivers’ abuse occurred within the scope of employment. The court says that’s possible:
Assaults of this nature are exactly why customers would expect taxi companies to perform background checks of their drivers. Holding Uber liable could also forward the underlying policy goals of respondeat superior, including prevention of future injuries and assurance of compensation to victims.
The judge sided with the plaintiffs on several other murky legal questions, saying it remained possible that Uber was a “common carrier,” negligently hired/supervised/retained a driver, committed fraud in describing the safety of its system, and could face punitive damages. In the face of so much legal ambiguity, why did the judge give all this benefit of the doubt to the plaintiffs? Uber filed a motion to dismiss, and the judge must treat the plaintiffs’ allegations as true. As the judge noted at one point: “To the extent that these are close questions, the Court finds that they are more appropriately resolved at a later stage of the litigation.” At the later stages, the plaintiffs might not satisfy the legal requirements and the judge could still rule for Uber on each and every point. However, if I were Uber, I’d be nervous about the tenor of the judge’s opinion.
While Uber can, and perhaps should, do more to prevent drivers from committing crimes against passengers, its massive size means that Uber cannot prevent all driver-on-passenger crime. To mitigate these risks, Uber could obtain insurance (or self-insure). Because these risks are insurable, even if Uber loses this case, it will not threaten Uber’s business. It could, however, raise the costs of Uber ridership for everyone. The court implies this cost shifting might be a good outcome; she wrote: “it is possible that allowing liability would more equitably spread the losses caused by the enterprise of shuttling customers in private cars.”
The court doesn’t discuss the role of Section 230, the 1996 federal law that says websites aren’t liable for third party content or actions. If Uber drivers are independent contractors, the court may decide that Uber isn’t liable for driver-on-passenger crimes based on traditional legal principles. If not, Section 230 could protect Uber as all driver-passenger communications mediated by Uber could be characterized as third party content to Uber and thus insulated from liability. Perhaps surprisingly, Section 230 might have a role to play even if drivers are Uber employees, but I am less certain that Uber will choose to press this point.
Case citation: Doe 1 v. Uber Technologies, 15-cv-04670-SI (N.D. Cal. May 4, 2016)