in Criminal Law Civil Law
Asked September 21, 2017

Liability of service provider in case of independent contractor's rash driving

  • 1 Answer

In case of independent contractor's rash driving and accident thereto can damages be claimed from the service provider company as it happened in cab providing companies like ola and uber? Also can validity of the terms and conditions of such companies be challenged as they are so not consumer friendly at all as they do not allow their liability in any case?

Answer 1


To answer your query, the distinction between agents and independent contractors needs to be looked at. In case of principle-agent relationship, the concept of vicarious liability can be applied. By virtue of this, the principle or the employer can be held responsible for the action of his agent (namely, driver) in this case. So, if you had hired your car from any rental company, in case of any accident during the course of the duty, the company will have liability or accountability.

However, the scenario is different in case of independent contractors. In such a case, the employer company (Uber or Ola) cannot be held accountable for the actions of the driver. In case of independent contractor, the concept of vicarious liability does not apply. Here, what work needs to be done have been told by the parent company, but, how it will be executed is solely dependent on the actions of the independent contractor and the parent company does not have a say in it. It is not a principle-agent relationship.

So, generally the company will not be liable to pay damages in case of an accident by an independent contractor. However, Uber does have a million-dollar insurance policy, whereby any accident which had occurred when there was a rider in the car and the driver was not intoxicated, then Uber’s insurance policy will cover the damages, both to driver and the consumer. Otherwise, the driver’s personal insurance policy will be invoked.

With regards to your second query, you might challenge the terms and conditions of the contract, but I feel it will not be of much use. The reason being, these are called what is commonly known as “take it or leave it” contract. Here, Uber has a particular policy and they will not change it. They are not forcing you to use their company. It is you, who voluntarily chooses to enter into a contract with them after reading their terms and conditions. Since there is no obligation to use their app, when you decide to use it, it will be deemed that you have agreed to their terms and conditions. Thus, you cannot go back on it now.

Agree Comment 0 Agrees about 4 years ago

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