No driv­ers, no li­a­bil­ity, Uber claims

Sil­i­con Val­ley firm uses le­gal strat­egy to dodge prob­lems, files, law­suit sig­nal

Baltimore Sun Sunday - - MARYLAND - By Greg Bensinger

SAN FRAN­CISCO — Uber con­tract driv­ers helped bring in more than three-quar­ters of the com­pany’s rev­enue in this year’s first six months. But as Uber would have it, the driv­ers aren’t es­sen­tial.

Uber raised eye­brows last month when its chief lawyer as­serted “driv­ers’ work is out­side the usual course of Uber’s busi­ness,” in a call lay­ing out the com­pany’s re­sis­tance to a Cal­i­for­nia bill that would al­ter the em­ploy­ment sta­tus of many gig work­ers.

But it’s a le­gal strat­egy the Sil­i­con Val­ley firm has been hon­ing for years that helps it avoid re­spon­si­bil­ity for the ac­tions of its driv­ers.

Doc­u­ments and a 2017 de­po­si­tion re­lated to an At­lanta civil suit, Jes­sicka Har­ris v. Uber, viewed by The Wash­ing­ton Post, of­fer a rare glimpse into Uber’s strate­gies for us­ing driv­ers’ in­de­pen­dent con­trac­tor sta­tus as a le­gal shield. Asked in a doc­u­ment to “ad­mit or deny that Uber is in the busi­ness of pro­vid­ing trans­porta­tion,” the ride­hail­ing firm’s at­tor­neys are stead­fast: “de­nied.”

Over the course of a nearly three-hour de­po­si­tion in the Har­ris case, Uber ex­ec­u­tive Ni­cholas Valentino, then an oper­a­tions man­ager for At­lanta, re­peat­edly cor­rected the plain­tiff’s lawyer when he re­ferred to the con­trac­tors as “driv­ers.”

“They are not Uber driv­ers,” Valentino said. “They’re in­de­pen­dent, third-party trans­porta­tion providers.”

He re­peated the claim no fewer than 16 times, to the at­tor­ney’s ap­par­ent con­ster­na­tion.

“If you are go­ing to keep say­ing they are not driv­ers, we are just go­ing to be fuss­ing about that all af­ter­noon,” said the at­tor­ney, Michael Todd Whee­les.

“That’s OK,” said Valentino.

Uber in a given year faces many law­suits rang­ing from fender ben­ders to wage dis­putes to more se­ri­ous in­ci­dents. Har­ris sued Uber and driver Robert Fer­gu­son, al­leg­ing that she nearly lost her leg af­ter be­ing struck by Fer­gu­son, who she claimed veered off the road.

At stake for Uber in its court bat­tles is the po­ten­tial for mil­lions in new li­a­bil­i­ties if Uber is found to bear greater re­spon­si­bil­ity for the ac­tions of its con­tract driv­ers, if they are re­clas­si­fied as em­ploy­ees.

Many com­pa­nies rely on con­trac­tors and gig work­ers. But what sets Uber and other ride-hail­ing com­pa­nies apart is that its cus­tomers spend far longer with the driv­ers, en route to their des­ti­na­tion, com­pared with, say, food de­liv­ery or dog­walk­ing services. The ra­tio of con­trac­tors to di­rect em­ploy­ees is high: For Uber’s 4 mil­lion driv­ers, the com­pany has 27,000 em­ploy­ees.

In public state­ments, Uber takes pains to show its col­lab­o­ra­tive re­la­tion­ship with driv­ers. CEO Dara Khos­row­shahi refers to them as “driver part­ners,” not­ing in an in­ter­view last Oc­to­ber that “if you’re go­ing to call your driv­ers part­ners, then treat them like part­ners.” It de­clared 2017 “the year of the driver” be­fore it was em­broiled in a series of cor­po­rate scan­dals.

The com­pany of­fered some driv­ers the chance to buy stock when it went public in May and it hosts reg­u­lar fo­rums where driv­ers can give feed­back to ex­ec­u­tives.

“Driv­ers are in­de­pen­dent con­trac­tors,” Uber spokesman Noah Ed­ward­sen said in a state­ment. “But that has never stopped us from mak­ing sig­nif­i­cant in­vest­ments in safety. Safety will al­ways be a long-term com­mit­ment for Uber and we will con­tinue work­ing to raise the bar to help pro­tect every­one who uses our plat­form.”

Gig work­ers earn money by per­form­ing tasks like de­liv­er­ing gro­ceries, fer­ry­ing pas­sen­gers or fetch­ing pre­pared food, ar­ranged by cus­tomers through mo­bile apps. Be­cause they aren’t full-time em­ploy­ees, they can log in to the app when­ever they wish to work, but also have to pay them­selves for things like fuel and health in­sur­ance.

A bill in Uber’s home state that could re­quire it to re­clas­sify driv­ers as em­ploy­ees, with ben­e­fits like paid sick leave, could also open the com­pany up to new li­a­bil­i­ties, ac­cord­ing to crit­ics. Uber has pushed back against the bill, cit­ing what it says may be the im­pact to driv­ers’ flex­i­ble work sched­ule.

“Li­a­bil­ity is one of the big un­spo­ken-about is­sues here,” said Lorena Gon­za­lez, a Cal­i­for­nia state assem­bly­woman who crafted the bill, known as AB5, that would make many gig work­ers em­ploy­ees. “We want to en­sure there’s re­spon­si­bil­ity at the end of the day and that they are not just pass­ing that along to some­one else.”

Ed­ward­sen said “li­a­bil­ity for safety in­ci­dents has sim­ply never been part of (Uber’s) ar­gu­ments or strat­egy around AB5,” and that “sug­gest­ing oth­er­wise is wrong.”

Uber de­clined to com­ment on the Har­ris case, which it set­tled out of court, or any other lit­i­ga­tion. At­tor­neys for Har­ris also de­clined to com­ment, as did the driver’s at­tor­neys. Valentino, the Uber ex­ec­u­tive who was de­posed in the case, de­clined through an Uber spokesman to be in­ter­viewed. Har­ris and Fer­gu­son didn’t re­spond to re­quests for com­ment.

Uber driv­ers’ em­ploy­ment sta­tus has been chal­lenged in mul­ti­ple law­suits, but Uber to date has avoided hav­ing to broadly rec­og­nize its gig work­ers as em­ploy­ees. Uber tends to fa­vor set­tling in­di­vid­ual cases out of court, rather than let­ting them go to trial, say at­tor­neys who have brought suits against the com­pany.

In ma­te­ri­als re­lated to the Har­ris case, sealed af­ter the mat­ter was pri­vately set­tled, Uber at­tor­neys and ex­ec­u­tives con­tend that the com­pany is noth­ing more than a mar­ket­place that hap­pens to be used for ar­rang­ing trans­porta­tion. And its chief le­gal of­fi­cer, Tony West, said last month that Uber’s busi­ness is “serv­ing as a tech­nol­ogy plat­form for sev­eral dif­fer­ent types of dig­i­tal mar­ket­places.”

But the com­pany is more in­volved than many on­line mar­ket­places, such as ecom­merce sites, in­clud­ing pro­vid­ing driv­ing di­rec­tions to driv­ers, set­ting fare rates and man­dat­ing punc­tu­al­ity and car type, among other cri­te­ria.

The distinc­tion in the Har­ris case — and many oth­ers like it — is cru­cial for Uber be­cause the com­pany ar­gues that as con­trac­tors, driv­ers and their be­hav­ior ul­ti­mately aren’t its re­spon­si­bil­ity.

It has made sim­i­lar ar­gu­ments in other law­suits. In a case in San Fran­cisco al­leg­ing an Uber driver made sex­ual com­ments to a 16year-old pas­sen­ger, set­tled in De­cem­ber, Uber’s at­tor­neys said “the part­ner driver was an in­de­pen­dent con­trac­tor re­spon­si­ble for his own means and meth­ods” and that Uber is “a tech­nol­ogy com­pany, not a trans­porta­tion com­pany.”

Courts have gen­er­ally sided with Uber and other firms re­liant on gig work­ers which have made sim­i­lar ar­gu­ments.

RICHARD DREW/AP

Uber raised eye­brows when its chief lawyer as­serted “driv­ers’ work is out­side the usual course of Uber’s busi­ness.”

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