The use of gig economy platforms (such as Uber, Doordash, and Fiverr) has grown at an explosive rate. Torts and employment disputes arising during gig economy transactions are becoming a regular occurrence. In part 2 of our gig economy series, Zachary Pyers and Kenton Steele will discuss the following questions:
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The use of gig economy platforms (such as Uber, Doordash, and Fiverr) has grown at an explosive rate. Torts and employment disputes arising during gig economy transactions are becoming a regular occurrence. In part 2 of our gig economy series, Zachary Pyers and Kenton Steele will discuss the following questions:
Visit our website for information about our legal services related to emerging technologies.
KHS Kenton H. Steele, Esq.
ZBP Zachary B. Pyers, Esq.
ZBP
Welcome back to the podcast series where we are exploring the legal issues surrounding the gig economy and tort litigation. We’re going to step into the second part of the series where we start to explore some of the legal issues that are present in the gig economy. Kind of as a reminder of the first episode that we did or the first part of the series, we really looked at defining the gig economy, the size and kind of the driving forces behind the rise and growth of the gig economy. Now as we step into the second part series, Kenton if you would, can you help to kind of explain what impact does the rise of the gig economy have on the legal world?
KHS
Certainly. It’s a very interesting question. As we talked about on our last episode, the gig economy really represents a departure from how we’ve traditionally viewed work arrangements. Right there, in the past it was much more standard to see typical employee/employer relationships that were long term whereas now due to new technologies, changes in the way people approach their daily lives, an increased demand for on demand services. There’s this big boom in increase in new employment relationships that we refer to as being part of the gig economy. So, it’s certainly interesting in the legal field, it’s a profession, it is a part of society that is driven by precedent, by what has occurred in the past. So, when radically new things, like the gig economy, really burst on to the scene and become more and more a part of everyday life, the law is in the position of responding to that without the typical tools of being able to look at prior cases, things that have happened in the past to dictate how disputes should be decided. And, where we see issues coming up are really in two distinct areas. One, is with respect to employment law questions. Right, there is an entire body of law that’s set up to provide certain protections to workers depending on what their classifications are. If you’re a traditional employee, there is unemployment benefits, workers compensation, other employment law protections. There are also some protections that are afforded to independent contractors although it is less than what is typically associated with longer term employment relationships. But, what the gig economy does is kind of throws a wrench into that analysis and Courts have struggled to find how to place these new relationships in the old employee independent contractor framework. Now, we also see issues related to the gig economy coming up with respect to tort liability. Right, if a worker who is performing an act on behalf of a gig economy company or platform causes an injury to someone in the course of carrying out that task they are being paid to do, does liability or responsibility for that injury extend up to the company that the person was working for? This is sort of a new question as I mentioned we have precedent and framework that tells us how that liability can be passed to the company if it’s a traditional employment relationship or if it’s a traditional independent contractor. But those same guidelines and framework that’s used becomes less useful when we’re talking about the gig economy. And Courts have started to take notice of this. Specifically, there is a very recent case out of an Appellate Court in Michigan where the Court stated it is evident that the nature of some employment relationships has changed. The gig economy has blurred the lines between employers, contractors, employees, and labor brokers. Additionally, in an appellate decision out of the Superior Court of New Jersey, the Court stated that the nature of work is changing. The advent of the so-called gig economy in the increasing use of independent contractors threatened to leave growing numbers of workers unprotected by the remedial statutes designed to shield them from the vagaries of the workplace. These new relationships also threatened to shield business from liability for the harm those workers cause while laboring on their behalf. And what those two quotes from those two Courts tell us is that the legal world judges, in particular, are beginning to see that they don’t have all the tools that they would like to have to reach the right outcomes in cases where issues are created involving gig economy workers.
ZBP
Now I think that’s a great recap as it relates to, you know, overall legal issues and the gig economy and some of the struggles. Now, what are some of the issues or the questions of tort liability, especially tort liability, involving gig economy workers and why are those unique?
KHS
That’s a great question, you know, what is it about the gig economy that makes it so that it doesn’t fit into the typical and traditional frameworks that we have. And one of the biggest things is really the flexible nature of the work relationships. So, in the gig economy, the work relationship between the worker and the platform where the employer can shift very rapidly where a person can go from, you know, acting on behalf of one platform in one minute and then ten minutes later they’re no longer, you know, working for that company and they’re now working for a different company. In a prior episode, we had talked about the different phases that are used to describe a ridesharing transaction, right, so, Phase 0 a person has a ridesharing app like Uber or Lyft installed on their phone but they’re not actually looking for a ride. Phase 1 starts when the driver opens the app and is waiting for a notification that someone’s looking for a ride. Phase 2 starts when the driver is on their way to pick up a passenger and Phase 3 starts when the passenger gets into the vehicle and they’re on their way to their destination. So, we have that sort of framework to look at, you know, what is the relationship and involvement between a gig economy, in this instance a ridesharing driver in the company and that helps us parse out, you know, how close the tide is the company to the worker. But, there are limits on the usefulness of that framework and it’s in part caused by again that flexible nature. So, with a lot of gig economy workers, they use multiple platforms simultaneously. We’ve all likely seen an Uber car that has the light, lighted placard for Uber in the front window and right next to it will be the lighted placard for a different company, for Lyft. Or, a Door Dash sticker on the back of a vehicle that’s being used to give Uber rides. So, because workers can be involved with multiple companies, it can really present some interesting and frustrating questions. So, just as an example, let’s think of a driver who is driving for Door Dash, they see a request, you know, their driving for Door Dash, they have the delivery in their vehicle and ask they’re headed to their destination, they see a request for an Uber ride that won’t take them out of the path of their Door Dash destination. So if the driver accepts that Uber fare, the driver would be in Period 3 or Phase 3 with respect to Door Dash, Phase 2 with Uber and Phase 1 with any other, you know, gig economy or ridesharing apps that might be running in the background. If that driver is involved in an accident or a crash at that point in time, there’s obviously a lot to sort out in terms of which companies should be involved or how liability will pass to any of the different companies that may be involved with that driver. And the other, you know, component of the gig economy and the platforms that are involved that create questions for how tort liability should be allocated, as we’ve talked about in the past, you know, control whether or not the hiring party is able to exercise control over the worker is sort of the key factor that we’re really looking at. Well, through a lot of the technological developments that we see, companies are able to exercise oversight more remotely over workers. So, in the past, if a person was, you know, being directly supervised and they were an employee, that was easy to pick out. Right, there’s a supervisor who is with you telling you what to do and where to go. Well, today, because of the tracking that’s possible through smart phones and the various instant messaging options that exist, an Uber driver might not ever be directly supervised by anyone from the company or a Lyft driver might not have anyone looking over their shoulder, but the company may be able to track where they go, how long it takes them to pick people up or drop them off at their destination, if they’re driving over the speed limit. If a passenger is leaving negative reviews for a driver that could impact whether or not the platform will continue to use that worker in the future and through all of these more indirect and remote means, the company is able to exercise some degree of control over the worker. This is part of what has made analyzing liability and vicarious liability in the gig economy setting somewhat complicated in what makes it a novel and unique question.
ZBP
Now as we talk about that novel and uniqueness, can you give us some examples when Courts have had to examine gig economy companies in the tort situation and kind of examine that novel or uniqueness. Yeah, absolutely. So, there aren’t as many cases as you would maybe think there would be involving, you know, gig economy companies and part of that is because those cases tend to settle or there are arbitration agreements involved that keep cases out of Court. But there are, of course, some disputes that actually reach a lawsuit being filed and a decision being made by a Court. So, in one example in a case involving Lyft that comes out of California, the vehicle involved, the driver was using a vehicle that was provided through a Lyft program. So the company actually provided the vehicle that the driver was using. But, when the crash occurred, the crash at issue in the case occurred, the driver didn’t actually have the Lyft app open. They were just using the Lyft vehicle for what was described as their own person, you know, purely personal activities. Ultimately, even though the tie between the company and the worker was relatively strong, you know the worker was driving a Lyft vehicle at the time, the Court ultimately granted a Motion for Summary Judgment dismissing Lyft from the case because liability did not extend to a worker’s purely personal activities. So, you know, broadening that out, that would basically cover periods in time where the driver is not directly doing something to benefit one of the gig economy companies if it’s Uber or Lyft, if they’re not in Period 2 or Period 3 that Courts may interpret that as, you know, the limits of when vicarious liability will be extended to a company like that.
ZBP
Now are there any examples that you have where Courts have analyzed this differently?
KHS
Yeah, absolutely. It’s, it’s not a one-sided analysis. It’s not as though gig economy companies are never found liable when a tort occurs. So, in one example, we’ve got a case out of Illinois that again is fairly recent. And, in this case, an Uber driver picked up two passengers late at night and was giving them a ride home and in the course of the ride, the Uber driver kicked the passengers out of the vehicle and terminated the ride. At the time that the driver kicked the passengers out, it was about 2:00 a.m. in not a great part of the city they were in and as the two people were walking home, they weren’t able to get another Uber ride so the two passengers started to walk home and in the course of doing that, they were hit by a vehicle. They filed a lawsuit against Uber and against the driver and ultimately the Trial Court granted Uber’s Motion to Dismiss and let them out of the lawsuit but on Appeal, the Appellate Court reversed that decision and found that Uber could be liable for, you know, those two passengers being hit because the company could reasonably foresee the danger that was created by leaving passengers stranded in a bad neighborhood late at night. And while there may not have been any individual person at Uber who was specifically aware of what had transpired, the company was certainly, that information was available to them because, again, of all of the tracking and the information that’s available through the platform and the app that both the driver and the passengers would have used that are constantly feeding data back to Uber. And, on the basis of that information that was available to Uber, the Court found that there was a potential for liability for the driver kicking those passengers out of the vehicle.
ZBP
Now are there other scenarios that you’re aware of where Courts have examined gig economy companies and looked at kind of different scenarios?
KHS
Absolutely. As we talked about in the last episode, the gig economy can take a lot of different forms. It’s not just ridesharing. It’s not just meal delivery. It can also be rentals of personal property like cars, or rentals of real property and that can also lead to accidents and injuries. So if we look at Airbnb for instance, we have a case out of Louisiana where the renter of an Airbnb property was injured when a staircase collapsed. That injured person filed a claim against Airbnb on the basis of a premise liability theory basically that Airbnb had given them access to a property and that the property was not safe. But, ultimately, that case was dismissed on the Court’s finding that Airbnb, even though they had you know made this arrangement between the property owner and the renter, Airbnb did not have any actual control over that property and so had no ability to identify a dangerous condition like the staircase that was about to collapse or to make any repairs. So, even though Airbnb was involved in that transaction, liability did not extend to the company for a premise liability claim. But that case sort of presents an interesting example of the different kinds of issues that we can see when we’re talking about liability or gig economy companies.
ZBP
That will conclude the second part of our series focusing on gig economy and the legal issues surrounding them. Join us back next time where we continue our examination on the impacts of the gig economy.