Gallagher Sharp Partner Rob Boroff Secures Big Wins For Rideshare Industry

10/12/2021
Gallagher Sharp LLP By Gallagher Sharp LLP

In a big win for the rideshare industry, Partner Rob Boroff with the assistance of Associate Sam Dodoo received summary judgment in three separate cases on behalf of Uber Technologies, Inc. (“Uber”) and Rasier, LLC (“Rasier”).  In granting summary judgment, the courts ruled that Uber and Rasier could not be vicariously liable for the underlying negligence of drivers who utilize the Uber App because an employment or agency relationship with drivers did not exist as a matter of law. These decisions set the precedent for and confirm what the Ohio General Assembly intended in R.C. 4925.10—that drivers who utilize rideshare applications such as the Uber App are independent contractors and that transportation network companies (“TNC”) should not be vicariously liable for an independent driver’s negligence.

In Erie Ins. Co. v. Ratchford, Stark C.P., No. 2020CV00853 (consolidated with 20CV00863) (Sept. 28, 2021), the plaintiffs alleged that the co-defendant driver who was utilizing the Uber App at the time of a motor vehicle accident was an employee or agent of Uber and Rasier so that they should be vicariously liable for the driver’s purported negligence. Uber and Rasier filed a motion for summary judgment, and while the court recognized that whether an employment or agency relationship existed was “a case of first impression in the state of Ohio,” such an issue was “uncomplicated.”

In granting Uber and Rasier’s motion for summary judgment, the court concluded that R.C. 4925.10 was “directly on point,” “clear and unambiguous,” and that it alone warranted summary judgment. The court specifically held that R.C. 4925.10(B) sets forth “without condition, limitation, or qualification,” that drivers utilizing the Uber App “are not agents except where agreed to by written contract.” Because the only contract the driver entered into defined the relationship as that of an independent contractor, the court determined that there was no employment or agency relationship. Consequently, Uber and Rasier could not be vicariously liable for the driver’s underlying negligence.

Interestingly, the court also held that applying the common law control factors test espoused in Bostic v. Connor, 37 Ohio St.3d 144, 146, 524 N.E.2d 881, 884 (1988) would be “inappropriate” given the clear and unambiguous language of R.C. 4925.10(B), and it concluded that “even if a Bostic analysis were undertaken here, the result would be the same, because the Bostic factors overwhelmingly demonstrate independent contractor status.” Of note, the court also rejected the notion that Uber’s Community Guidelines somehow established an employment relationship given that they are simply “guidelines” and apply to “all Uber platform users,” including both riders and drivers.

Similarly, in Michot v. James River Ins. Co., Summit C.P., No. CV-2019-11-4429 (Oct. 4, 2021), the plaintiff, a passenger in a vehicle being driven by the co-defendant driver utilizing the Uber App alleged that an employment and agency relationship existed so that Uber and Rasier should be vicariously liable for the co-defendant driver’s underlying negligence. Like Ratchford, the judge in Michot granted Uber and Rasier summary judgment by relying upon R.C. 4925.10(B) and concluding that the co-defendant driver was neither an employee nor agent of Uber and Rasier. The court also flatly rejected the plaintiff’s argument that, when applying the Bostic common law factors, Uber and Rasier exerted sufficient control over the co-defendant driver to create an agency relationship and become vicariously liable for his alleged negligence.

Finally, the court in Giffin v. Uber Technologies, Inc., Summit C.P., No. CV-2019-06-2295 (Sept. 29, 2021) granted Uber and Rasier summary judgment after finding as a matter of law that the co-defendant driver who was utilizing the Uber App at the time of an accident was nothing other than an “independent contractor.” In reaching this decision, the court specifically criticized the plaintiff’s reliance upon certain actions undertaken by Uber and Rasier as evidence of “control” since they all involved requirements mandated by R.C. 4925.01 et seq. The court correctly held that compliance with state and federal law does not demonstrate the type of control necessary to establish an employment relationship between parties

The decisions in Ratchford, Michot, and Giffin are significant because they are the first cases following the enactment of R.C. 4925.10 to address and analyze whether drivers for TNCs and rideshare companies are indeed independent contractors and the rulings should be relied upon by TNCs and rideshare companies to obtain dismissal or summary judgment on the issue of vicarious liability.