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Posts Tagged ‘Ridesharing’

PA Supreme Court Rules Uber Drivers Entitled to Unemployment Benefits

Posted on: August 7th, 2020

By: Erin Lamb

In Lowman v. Unemployment Compensation Board of Review, the Pennsylvania Supreme Court has ruled 5-2 that Uber drivers are not engaged in independently owned businesses when driving for Uber and are therefore eligible for unemployment benefits. The ruling is expected to open the gates for more “gig economy” workers to not only claim unemployment benefits, but also bring workers’ compensation claims.

The Uber driver had lost his job as a behavioral health specialist and applied for unemployment benefits. While awaiting that determination, he began working as an Uber driver. A month later, the Unemployment Compensation Service Center determined he was ineligible for benefits because of his agreement with Uber. The Commonwealth Court, which is the appellate court for certain cases in Pennsylvania that largely arising out of actions of the government, reversed the decision. However, in upholding that decision the Supreme Court went further in its analysis. The Commonwealth Court decision had still focused on the driver’s own actions and whether they were taken to further self-employment.

The Supreme Court decision, authored by Justice Donohue, eschewed that traditional analysis and instead focused on the company’s relationship with the drivers. The opinion focused on factors that showed that the company controlled the driver and found them dispositive when compared to the factors that indicated the drivers could operate independently. Uber argued that its contract with the driver referred to him as an independent contractor and he used his own car and cellphone, showing that the driver controlled his own employment. Justice Donohue found that the mere fact that drivers use their own cellphones and vehicle was immaterial when the “fundamental tool” necessary to provide driving services is the Uber Driver App and only Uber provides the app. Without it, drivers can provide no service. It is the sole method that drivers can use to connect, meet, and/or interface with passengers. To receive the Driver’s App, the driver must apply to Uber through Uber’s own application process. Drivers also have no control over the customer base, and was prohibited from subcontracting out his account to another driver. Justice Donohue also noted that Uber monitors, reviews, and supervises the drivers’ performance, and that Uber sets the pay structure.

Chief Justice Saylor dissented, with Justice Mundy joining.

If you have questions or would like more information, please contact Erin Lamb at [email protected].

Need a Lyft? Georgia Court of Appeals Decision Raises Coverage Questions for Ridesharing Services and Their Drivers

Posted on: February 19th, 2018

By: Connor M. Bateman

Most personal automobile insurance policies exclude coverage for damages that result from the ownership or operation of a vehicle used as a “public or livery conveyance.” Although typically undefined in the policy, this phrase has generally been understood to encompass vehicles that are “used indiscriminately in conveying the public, rather than being limited to certain persons and particular occasions or governed by special terms.”

The Georgia Court of Appeals recently weighed in on the scope of this exclusion in Haulers Insurance Co. v. Davenport.  In Davenport, the plaintiff sustained injuries in a car accident, sued the other driver, and served his uninsured motorist carrier (Haulers) with a copy of the complaint. At the time of the collision, the plaintiff was giving a ride to a female friend who would occasionally pay the plaintiff to drive her into town. There was no evidence, however, that the plaintiff ever offered paid rides to the general public. The Court of Appeals rejected Haulers’ argument that the policy’s public or livery exclusion barred coverage, reasoning that the exclusion was inapplicable absent evidence that the plaintiff “used his vehicle indiscriminately to transport members of the general public for hire, or regularly rented out his vehicle for hire.” The court recognized, however, that the exclusion would apply in cases where the driver “presents his services indiscriminately to the general public for hire.”

In light of the rising popularity of Transportation Network Companies (“TNCs”) such as Lyft and Uber, the coverage issues presented by this oft-forgotten exclusion should be carefully reexamined. TNC drivers, who use their personal vehicles to transport passengers, will often have no coverage under their personal policies due to the public or livery conveyance exclusion. This exclusion clearly applies to drivers actively transporting passengers and may even be triggered when the driver is simply using the ridesharing application to “troll” for potential customers. While some of these gaps have been addressed by commercial insurance policies provided by the TNCs, drivers may still be left without coverage in certain situations. For instance, although TNCs typically provide liability coverage for a driver who has the app turned on and is waiting to accept a ride, the TNC policies will not likely cover damages caused by someone or something else during that initial period. To account for this, the TNCs suggest that such damages may be covered by the at-fault driver’s policy or the TNC driver’s personal policy. However, the public or livery conveyance exclusion often extends to uninsured motorist, collision, and comprehensive coverage. And because courts have held that the public or livery conveyance exclusion applies when drivers “present their services” to the general public, the exclusion is arguably triggered even when the TNC driver is merely waiting for the application to connect to a customer.

Although the reach of this exclusion has yet to be fully examined in the context of ride-sharing services, these and other coverage issues will likely continue to arise. For additional information, please contact Connor Bateman at [email protected].