MEMORANDUM
TO: All Employees
FROM: Finn Balor
DATE: November 20, 2017
SUBJECT: An Evaluation into Uber’s Legal Exposure for The Conduct of Its Drivers
Uber was launched in San Francisco in 2010 and has experienced immense growth ever since. It is distinct from the traditional taxi system as customers using their mobile phones call up and request for rides. It is a known fact that Uber is one of the newer forms of entrepreneurship inventions seeking to take advantage of the free market economy which entails the exchange of services between a willing buyer and willing seller. However, this development has raised a host of legal questions for companies around the law of agencies and there is a lot of uncertainty as to what is right or wrong. To clarify these issues, the principles of the agency have to be spelled out and they are as follows.
Passenger privacy- this is one of the key principles of the agency. Drivers are not allowed to share customer information with third party. Details such as the name and residence of the client although known to the driver, must not be shared with other members of the public so as not to jeopardize client’s safety.
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Screening drivers- Uber requires that drivers must have a clean record. The agency reserves the right to screen all its drivers and ascertain their suitability. They must have a clean record for the past seven years with no hit and runs, resisting or evading arrests, over speeding or reckless driving among other traffic offenses.
Insurance- the agency requires that drivers must insure their vehicles. Full-time professional drivers must be covered by commercial insurance for any form of accident.
Vehicle inspections- the agency has a principle of carrying out random unprecedented vehicle inspections. Bad drivers are not the only reason for accidents but also unroadworthy vehicles. If a vehicle is less than two years old it must be inspected annually and semiannually for older ones.
Safety for drivers- professional drivers usually bear the greatest security risks and may be victimized by crime. This is because carrying anonymous passengers and cash makes them potential targets. Uber, however, eliminates this vulnerability as no cash ever changes hands and passengers are not anonymous.
Uber may be liable for the conduct of its drivers only under the following conditions.
When an inappropriate and abusive language has been used. Uber is answerable whenever the driver has been disrespectful to the clients. The company's code of conduct forbids the use of verbal threats or gestures which may be sexual, aggressive or discriminatory.
Damage to property. For example, reckless driving, smoking or drinking while on duty is strictly forbidden. Uber will, therefore, be answerable in the event that its drivers engage in such activities which may put people's lives in danger.
When a physical contact has been initiated by the customer. Uber's guidelines are clear on the driver-client relationship. It should remain fully professional and a driver ought not to touch or flirt with the customers. Whenever a driver initiates sexual contact with the client, the company is held responsible.
Disregard of the local laws. Uber may be liable whenever drivers break the laws of the land. Traffic offenses such as over speeding, ignoring traffic lights and aiding crime may require the company to be answerable. If the company is made aware of such actions by any of its drivers, it shall take actions against the said driver in as much as the company will be legally responsible for the law enforcement.
Engaging in unwanted contact with passengers after the trip is over. For example, visiting, calling or texting customers after completion of a ride is strongly forbidden. Therefore, Uber may be held responsible whenever its drivers engage in such manner.
Recommendations
As it stands, the company is liable for numerous driver actions which make it incur a lot of unnecessary expenses and make drivers less responsible. In light of all these issues, the company can put measures to limit its legal exposure for the conduct of its drivers. The following are some of the steps the company can take.
The use of employer or independent contractors (ICs). Distinguishing employees from independent contractors can be helpful and is still applicable in today’s economy. Uber drivers are ICs and the company has no control over when they work, which routes to use or the people they interact with. The use of independent contractors at all time will ensure the company limits its legal responsibility for the drivers’ conduct since they can be held responsible for their vehicles and actions while on duty.
Economic reality test. This test is recommended since it takes into account a great range of factors. It examines the degree of control wielded by the employer and whether the employee agreed to offer services in exchange for a wage. In this case, the degree of control wielded by Uber company is minimal, to say the least, and thus reduce the company’s legal exposure.
The use of psychological inducements. This recommendation can be helpful as it motivates the drivers. Uber can employ social scientists to experiment different techniques and rewards to diligent drivers. This action can make them work longer hours, follow traffic rules and not engage in legal malpractices therefore not exposing the company to legal questionings.
The agency will be glad to discuss all these legal issues with interested parties as well as the suggested recommendations should any question arise. The company is confident that if all these recommendations are implemented then profitability will be maximized.
Yours Sincerely,
Finn Balor.
