There has been a huge uptick in rideshare drivers, now that the Transportation Network Companies (TNC’s) of Uber and Lyft have gone mainstream. These companies have majorly changed and streamlined the driver-for-hire experience.
Rather than rely on cab companies having a limited fleet and drivers, Uber and Lyft use computer applications to match riders with drivers. They save money because they neither have to maintain a fleet of vehicles, nor pay employees to man a shift, regardless of whether there are customers.
This streamlined approach has been a welcome change to both customers and drivers. The customers have greater flexibility in scheduling rides last minute; are generally charged less; and often ride in nicer cars than those available in cab fleets. The drivers are not committed to shifts, driving around hoping for a rider, with a low salary that is unreliably supplemented by random tips.
But this revolution in transportation has not been without glitches.
While many drivers are happy to make a steady income while picking their own hours, a number of costs have been passed onto them by their employer. Most obvious is the fact that the wear and tear on the vehicle is paid for entirely by the driver.
A less obvious cost shift has been in the area of insurance coverage. To date, drivers for TNC’s have generally been considered independent contractors, as opposed to employees. A result of this, they have difficulty qualifying for Workers’ Compensation.
Alternative Insurance Options
Uber has worked with insurance companies to provide their drivers with an option to participate in an alternative insurance plan, instead of Workers’ Compensation. Through Aon P.L.C. and OneBeacon Accident & Health, Uber drivers in 40 states, including Delaware, can now gain access to an insurance program to get coverage for work-related injuries.
The policy, modeled after similar policies covering truck drivers, is designed to fit the specific needs of TNC drivers. It covers medical expenses up to $1 million, disability benefits up to $500.00 a week, death benefits up to $50,000, and survivor benefits up to $150,000. Drivers decide whether or not to use the app. Coverage has been designed to be cost neutral to the driver.
The Employee Versus Independent Contractor Debate
Workers’ Compensation provides coverage for medical expenses, disability benefits, and lost salary due to a workplace injury. Employers pay into the fund, so the expense is not entirely borne by the employee.
In contrast, alternative insurance policies are paid entirely by the employee.
Although TNC’s take the position that their drivers are independent contractors, that is not necessarily settled legally. An employment relationship is determined by a number of factors.
Some lower courts have examined Uber’s relationship with its employees and found that, since Uber exerts control over its driver performance and determines fares, its drivers are employees. However, some Federal courts have disagreed, and found the drivers to be independent contractors.
Wilmington Workers’ Compensation Lawyers at McCann Dillon Jaffe & Lamb, LLC Assist Injured Workers in Numerous Industries
If you have been injured at work, one of the experienced Wilmington Workers’ Compensation lawyers at McCann Dillon Jaffe & Lamb, LLC can provide you with professional advice and help evaluate your case. We are able to gather relevant evidence, analyze the situation, and determine the most advantageous approach for you to take. Call us at 302-888-1221 or contact us online to arrange for a free initial consultation.