Is Uber liable? A platform perspective
On the 27th of September the San Francisco Chronicle was the first to report on an assault that weekend by an Uber driver on one of his passengers. The authorities reported that the driver allegedly fractured the passenger’s skull after an argument about the car route. In subsequent days the physical condition of the passenger deteriorated, and he risks losing one of his eyes Uber responded to this incident, and subsequent investigation, by immediately suspending the driver and cooperating with the authorities. In a later statement an spokeswoman for the company declared that safety is Uber’s “number one priority” and that Uber takes “reports like this seriously and [is] treating the matter with the utmost urgency and care.” However, this is only the latest in a number of incidents between Uber drivers and passengers. A notorious case is former Uber driver Daveea Whitmire, a formerly convicted felon, who was also charged with assault. These incidents have sparked discussions with regards to if Uber is in some way liable for these serious cases. This is an interesting debate, since it fits needlessly into the area of platforms and networks discussed in recent lectures.
As you may be aware, Uber is a ridesharing service. The company uses a Smartphone application to connect customers with drivers of vehicles. For this case the company sees itself as only being a mediator between these groups, or in short a technology company, not a transportation company. It claims it is not liable for any circumstance where you experience discomfort or more serious harm from their service. This can be traced back to their terms of service which stipulates that “you expressly waive and release the company from any and all liability, claims or damages arising from or in any way related to the third party transportation provider”. But can this defense hold, or is Uber more than just a mediator. Can people expect their real world service from a Smartphone application.
Normally, internet platforms such as Ebay or MySpace are legally protected from the activities that involve the different users offline. For instance Section 230 of the Communications Decency Act offers immunity to providers for the information they publish that is provided by others. As a result, Ebay is not liable if the signed picture of Steve Jobs you purchased, was actually forged by Stephen Jobs from Nottingham. It is also the same rule of law that Airbnb has successfully applied to protect itself from claims when guests vandalize homes. Uber argues that this legislation also applies to them, since as previously mentioned, they deem the company as a mediating technology company. However, as Eric Goldman a law professor points out, they appear to show more features of a retailer than an online platform. Passengers are not really free to pick the Uber drivers themselves, as it is partly dependent on geography. Furthermore, Uber largely controls the prices that the driver charge. Combining this with the components of a platform defined in relevant literature, such as Eisenmann et al, 2008, it might be possible to defend such a position. Perhaps Uber does share more characteristics with Amazon than with Ebay, which can have significant implications for their liability. “Real” taxi companies have been held responsible for the actions of their drivers, and have often used insurance policies to pay claimants. Obviously, these insurance costs put them on a competitive disadvantage compared to Uber, as long as they are not liable in any way .so far Uber has been able to escape significant liability, as judges have often ruled the drivers as being individual contractors, not employees. However, this new incident can impact such rulings.
So what does the world of business think? Is Uber only a mediator, or should they be held liable similar to other private transportation companies