For the last year, the court system in the United States has dealt with a steady stream of cases regarding the status of drivers who work for the new ride-sharing services. At issue is whether these drivers are classified independent contractors or actual employees. Several states, including California and Utah, have determined that drivers are employees and not independent contractors. However, the ride share parent companies are fighting these decisions. The companies assert that due to the autonomy and freedom of the drivers and the way they accept and are compensated for assignments, drivers are independent contractors. One issue that stems directly from this debate is the issue of workers compensation benefits for these drivers.
Several drivers have reported being attacked or injured while performing services for ride-sharing companies. Since the companies hold that the drivers are independent contractors, they have no workers compensation insurance to cover the drivers. As a result, the drivers are not covered after an accident or injury. The driver must rely on his or her own automobile insurance policy or medical insurance through their regular employer (if they have another job). Some drivers have no other source of income, so they must pay out of their own pocket for medical treatment, rehabilitation services and other related costs. In addition, there is no compensation for loss of income and loss of use of property for the driver.
Again, California and Utah are among the states that have deemed ride-share drivers to be employees and not independent contractors. While this means additional up-front costs for the ride-share companies in the form of insurance coverage and administrative costs, workers compensation solutions can actually save the company money later. If a driver is injured during the performance of job duties, the existence of workers compensation insurance to pay for medical expenses and lost wages can protect the ride-share service from a hefty lawsuit. The only question that remains is how much the employee of one of these "non-traditional" jobs would be entitled to in lost wages, since the employees work when they want. Since employees are paid by the job and do as many or as few jobs as they want, they therefore don't have a consistent, set income each pay period.
Considerations for Workers
The ride-share industry can provide much-needed cash for those who are unemployed or under-employed. However, each employee should weigh the cost of operating their own vehicle, paying their own income taxes and taking care of administrative tasks, against the amount they earn per ride. This will allow the employee to determine if they are actually making money to drive for a ride-share company, or if they should look elsewhere for income.Share