For many years, there have been arguments that Uber and Lyft should be liable for accidents their drivers cause as a result of the distractions produced by the driver app. This app requires the driver to look at it for directions on where to pick up the passenger, where to drop them off, and even to respond to additional ride requests while the driver is transporting a passenger.
While the companies provide a third-party liability insurance policy that compensates those who negligent drivers injure, how they classify their drivers substantially limits any further liability they have.
When a company has employees, they are vicariously liable for the actions of those employees during work time. For this reason, other providers of commercial transportation services—such as taxis, delivery drivers, and even commercial trucking services—are the liable party when an employee has an accident.
However, at least for the time being, Lyft and Uber classify their drivers as independent contractors, not employees. This not only gets them off the hook for having to pay overtime or offer other benefits but also limits their liability for what their drivers do, even if the driver causes an accident while trying to interact with their app.