Why Uber’s Fate Could Hinge on This Tragic Accident
(Updated by Endah)
- BY MARCUS WOHLSEN
- 6:30 AM
Photo: Chris Hondros/Getty Images
On New Year’s Eve, Syed Muzzafar was driving his Honda SUV in San Francisco when he turned a corner and allegedly struck six-year-old Sofia Liu in the crosswalk, killing her and injuring her mother and brother. Pedestrians are killed by cars with alarming frequency in San Francisco (21 last year, including six in December alone). But this accident was unique: Muzzafar was a driver for Uber.
This week Sofia’s family filed a wrongful death lawsuit against Uber, arguing that the company bears responsibility for the accident because 57-year-old Muzzafar was one of its drivers. But Uber saysMuzzafar was not “providing services on the Uber system” at the time of the accident, meaning he did not have a passenger and was not on the way to pick one up. The company’s implication is clear: It shouldn’t be held liable.
Ultimately the case against Uber hinges on this question: Does a driver who uses Uber or any other ride-sharing app to find passengers “work” for that company? Or is that like saying someone who rents out a room on Airbnb is also employed by that company as an innkeeper? The answer could have serious implications not just for Uber, but the future of transportation.
Syed Muzzafar. Photo: San Francisco Police
To understand why the issue in this case isn’t as simple as it may sound, it’s important to remember that Uber sees itself not as a transportation company but as a technology-driven marketplace. In Uber’s view, it connects drivers and riders. It’s a platform, a facilitator. It doesn’t manage a fleet of cars.
In that context, Uber’s self-described arrangement with drivers makes a certain kind of sense. They work for themselves, not Uber, which is just an ultra-efficient tool they use to find fares and collect payment. For its help, Uber takes a cut of the fare.
Such a setup was easy to justify under Uber’s earliest incarnation. When the service launched in 2010 in San Francisco, the system was limited to limo drivers who were already licensed and carried their own insurance under state regulations. Many of these drivers already worked for limo companies, and Uber helped them keep their back seats full between traditional bookings. The question of liability for limos using Uber doesn’t seem especially fraught, since these are clearly commercial vehicles doing commercial work with commercial insurance. The driver and the limo company, if there is one, clearly have responsibility (though whether Uber might as well is an issue being played out in a unrelated personal injury case).
The issue gets more complicated in the case of Sofia Liu’s death, because Muzzafar was driving for a more recently launched service, Uber X, in which drivers use their personal vehicles — a model similar to those offered by Uber competitors Lyft and Sidecar. For Uber X rides, the company offers a $1 million insurance policy, but only from the time a driver taps the Uber app to accept a requested ride until the passenger exits the vehicle. In order to receive a ride request, a driver must be logged into the Uber app, which the wrongful death suit claims is enough to make Uber responsible. After all, the suit argues, having drivers logged in is a precondition of Uber making money.
“Regardless of whether a driver actually has a user in their car, is on their way to a user who has engaged the driver through the app, or simply is logged on to the app as an available driver, Uber derives an economic benefit from having drivers registered on the service,” the suit argues.
By the logic of the sharing economy, however, having an app open isn’t necessarily the same as the driver of a traditional taxi eying the sidewalks for a new fare. In theory, an Uber X driver can work as little or as much as he or she wants, and accept or reject any fare. Having the app open might mean a driver is looking for the next passenger. Or it could the driver is just checking out how many other drivers are on the road. Or the driver could have been working but then decided to head to a party without closing the app. Or the driver could be running errands and have the app open casually in case a passenger pops up somewhere between the grocery store and the mall. In those scenarios, whether a driver is “working” or not gets fuzzy.
None of those scenarios appear to apply to Muzzafar, whose attorney has said he was indeed on the job at the time of the accident. “He was working for Uber,” the lawyer, Graham Archer, told The New York Times. “He was waiting for a fare.”
But a court will have to decide more than just whether Muzzafar was seeking a next fare. The case also turns on whether that waiting equals “working” for Uber at all. If Uber is liable, does that mean Airbnb is liable if a “guest” trashes the apartment of a “host?” Is eBay liable if a toaster you buy from a stranger short-circuits and zaps you?
Uber CEO Travis Kalanick. Photo: Jon Snyder/WIRED
At the same time, if Uber isn’t liable, what happens to families like Sofia Liu’s? Muzzafar is reportedly the father of four who was driving to support his family. As ride-sharing using private vehicles spreads via well-funded tech startups, do we expect the drivers themselves to pay out personal injury damages if they strike a pedestrian or to carry their own million-dollar insurance policies? Would insurance companies even offer such coverage?
Whatever the outcome of this one case, these are questions that aren’t going to go away, at least until clear and consistent laws are put into place that account for the complexities of this new technology and business model. Whatever the traditional taxi industry may hope, using smartphone apps to hail rides is here to stay. Ban them altogether, and underground versions of ride-sharing will appear, just like those guys who hang around baggage claim offering rides. In the politically-charged atmosphere around ride-sharing, with the taxi lobby on one side and the tech lobby on the other, the prospect of reasonable and fair regulations anytime soon seems dim. Until then, the courts are the most likely venue for determining ride-sharing’s future.