Ride-Sharing Companies May be Required to Purchase Massachusetts Workers’ Compensation Insurance for Drivers

If drivers for ride-sharing services such as Lyft Inc. and Uber Technologies Inc. are successful in ongoing court challenges to their independent contractor status, the companies may be on the hook for workers’ compensation insurance premiums in Massachusetts and across the country. In two separate cases filed in California in 2013, drivers claim the ride-sharing companies illegally shifted labor costs onto workers by inaccurately labeling them independent contractors.

As a result of the lawsuits, the ride-sharing companies may need to reevaluate their business models in order to provide workers with increased automobile insurance coverage and fuel costs. In addition, the businesses will be responsible for providing unemployment insurance and job-related accident injury protections if the drivers prevail. Since an employer may not charge employees for workers’ compensation premiums, the associated costs would necessarily be borne by the ride-sharing companies.

It is currently unclear how many ride-sharing drivers operate for the two companies. According to an Uber survey, over 162,000 individuals provided driving services through the business at least four times in December 2014. In its own defense, Uber apparently claims it is merely a software platform rather than an employer. At a January hearing, however, a federal judge presiding over a lawsuit against the company reportedly expressed skepticism regarding the company’s claim. The judge has also refused to grant Uber’s request to dismiss the drivers’ employment lawsuits.

When a ride-sharing driver is involved in a collision, it is often unclear who is responsible for the worker’s harm. According to NCCI, a workers’ compensation rate-making agency operating in 35 states as well as Washington, DC, ride-sharing services are expected to be one of the fastest developing insurance issues across the U.S. in 2015. As a result, many states are now considering legislation related to liability accident coverage for such “transportation network companies.”

Sadly, a serious workplace injury can leave you incapacitated or worse. According to the U.S. Bureau of Labor Statistics, transportation incidents accounted for about 41 percent of fatal accidents at work across the country in 2011. In Massachusetts, workers who have been unable to work for at least five days due to a work-related injury are eligible to receive medical treatment and weekly financial compensation. An experienced workers’ compensation lawyer can help.

If you or someone you love was hurt in a work-related motor vehicle or other accident in Massachusetts, you may be eligible to recover workers’ compensation benefits. The skillful lawyers at Kantrovitz & Associates, P.C. are available to assist you with navigating the process of your workers’ compensation case. To speak with a dedicated Massachusetts workers’ compensation lawyer, contact Kantrovitz & Associates, P.C. through our website or give us a call today at 800-367-0871.

Additional Resources:

Uber, Lyft could be forced to provide drivers with workers comp benefits, by Sheena Harrison, Business Insurance (subscription required)

Workers’ Compensation