Summary

Uber has buried statistics on assaults and accidents on its platform for years.  Journalists and advocates have dug hard and are revealing disturbing levels of both.  As more customers are suing the company for its inadequate safety measures, Uber is responding with a ballot initiative in California that would limit its liability for accidents, and consumer attorneys are supporting measures that would increase Uber’s liability and accountability.

Analysis

A recent expose in the New York Times revealed how frequent sexual assaults are on Uber, and exposed the company’s efforts to hide the problem, limit its liability, and silence victims.  According to the Times, Uber received a report of sexual assault or sexual misconduct in the United States almost every eight minutes on average between 2017 and 2022 — far more than what the company had ever publicly disclosed. Uber executives have long been aware of the extent of sexual violence occurring through its app, but have done next to nothing to address the problem.

Shortly after that news hit, an Arizona federal jury found Uber liable for a sexual assault by a driver on a passenger, awarding $8.5 million in compensatory damages.  Uber was not found negligent in its safety measures but was held responsible for the driver as an “agent” of the company.  Hundreds more lawsuits are pending, many in California.

Accidents have also been difficult to track.  Here in California, a months-long investigation by the San Francisco Public Press revealed that the California Public Utilities Commission — the agency charged with regulating the state’s ride-hailing companies — had failed to publicly release data on thousands of accidents involving Uber and Lyft.

Available information indicates that in just one year, 2019- 2020,  there were a whopping 27,000 reported rideshare accidents, more than 14,800 of them attributable to Uber.

Could the problem be with the drivers?  Uber doesn’t think so; its latest ballot initiative campaign in California, thinly disguised as an attempt to protect accident victims from unscrupulous attorneys, would limit its own financial liability for accidents.  It would cap lawyers’ fees and even limit medical damages, and would apply to all car accidents in California, not just Uber crashes.

Uber has had great success with purchasing public policy in California in the past.  In 2020, the company spent $50 million on a deceptive and misleading campaign to deny workers the right to be classified as employees, succeeding in getting a legislatively approved law to do so overturned.

The company has put about $32.5 million into this recent effort to reshape California law in its own favor so far, according to campaign finance records. Its opposition, led by the Consumer Attorneys of California, has said it will spend even more to fight Uber’s proposal as well as to promote its own competing initiatives.

The conflict was on display during the Super Bowl, when Uber’s  “A More Affordable California” ran a spot denouncing personal injury attorneys as ambulance chasers who simply take advantage of accident victims to line their own pockets. It declared: “The billboard lawyers make millions, while Californians are left broke and broken.”

The billboard lawyers didn’t take this lying down.  Ads they ran in California during the Super Bowl referenced the NY Times articles about sexual assaults, setting the stage for a pair of ballot initiatives that would increase corporate liability for passenger injuries on ride-sharing platforms and increase liability for sexual misconduct, whether by drivers or riders.

One measure would require rideshare companies to fingerprint drivers and run background checks before hiring them, and prevent the hiring of drivers who have been convicted of violent crimes, which is now allowed in some cases.  The other would increase companies’ legal liability for vehicle accidents and sexual misconduct or assault committed by its drivers.

Doctors and other medical providers are also fighting back and formed a political action committee, “Providers for Patient Care,” to oppose Uber’s initiative, which would limit recoverable medical costs.  According to a report by California nonprofit Consumer Watchdog, Uber’s initiative would reduce the medical costs that injury victims can recover after a car crash by tying reimbursements to Medicare levels.

The way attorney fees work in these cases is that accident victims seeking damages usually hire a lawyer on a contingency basis, which means the attorney is paid only through an award of damages- if they don’t win, the customer pays nothing. If damages are won, the attorney will usually take 30-40% of the award as their fee.  Uber would limit that to 25%.  Of course, Uber puts no such restrictions on its own attorneys; their top lawyer, Tony West, was paid over $12.7 million last year.

Consumer Watchdog says “that imbalance could alter settlement dynamics and tilt leverage toward corporate defendants, particularly in rideshare cases involving companies with substantial defense budgets.”

To date, none of the initiatives have qualified for the ballot, which requires a set number of voter signatures depending on the type of initiative.

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