Australian Uber drivers may be without access to workers' compensation insurance
Uber’s rapid rise in scale and popularity has brought with it a range of legal arguments in countless international jurisdictions, not the least of which focus on the safety of ridesharing for both customers and drivers alike. Here, Solicitor Hannah Staunton and Partner Robert Tidbury discuss the new mode of transport and the implications for ridesharing drivers who suffer personal injury while on the job.
It is undisputed that the most well known and widely used rideshare service operating in the world today is Uber. Launched in the USA in 2010, and expanding to Australia in 2012, Uber’s app-based rideshare service connects drivers known as “driver partners” who use their own personal vehicles to transport customers needing a ride.
Ridesharing is currently illegal in all Australian states and territories except for the Australian Capital Territory (ACT). In October 2015 the ACT government passed the Road Transport (Public Passenger Services) (Taxi Industry Innovation) Amendment Bill 2015 to amend the Road Transport (Public Passenger Services) Act 2001. The amendments to the Act will legalise and regulate the provision of ridesharing services in the ACT. The question now on everyone’s lips is: which states and territories will follow the lead of the ACT and legalise ridesharing?
While there are numerous issues regarding the legality of ridesharing in Australia, one topic of interest is whether Uber and other ridesharing providers are required to hold a valid workers’ compensation policy of insurance for its drivers in each Australian state and territory. Uber’s position on this issue is that the relationship between it and its drivers is a ‘contract for services’ between two independent contractors; meaning that Uber is not required to hold a valid workers’ compensation policy of insurance for drivers.
Uber’s position on the issue has meant that if an Uber driver suffers personal injury while driving, he/she can only make a claim on their personal compulsory third party (CTP) insurance policy. Some insurance companies, however, are rejecting such claims upon discovering that the personal injury was suffered while the driver was providing an illegal rideshare service.
If an Uber driver’s CTP insurance policy does not extend coverage, Uber publicly states that it does hold up to US $5,000,000 of contingent insurance coverage for all driver partners in Australia to cover bodily injury and property damage to third parties. The question, however, is whether Uber’s contingent insurer will agree to extend coverage to their drivers in such a situation.
If an Uber driver is not covered under his/her own CTP insurance policy, and Uber does not extend its contingent insurance coverage, then effectively Uber drivers may be uninsured and have no access to compensation in the event that they are permanently impaired and/or cannot work. While advocates for Uber drivers argue that this is unjust, the counter argument can be made that Uber drivers are made fully aware that they are responsible for their own insurances when signing up to be drivers.
Uber drivers may be eligible to apply for their own workplace personal injury insurance policy that many insurers make available for contractors and self employed individuals. Such insurance policies provide coverage to an individual in the event of a work-related injury. There is no guarantee, however, that insurers will agree to provide such insurance in those Australian states and territories where ridesharing is currently illegal.
Many lawsuits and class actions are being filed in states and territories around the world, particularly in the USA, against Uber claiming that Uber’s relationship with the partner drivers is an employer – employee relationship and not an independent contractor relationship. In arriving at a decision in those matters courts will evaluate all features of the relationship between Uber and driver partners to decide whether an employment relationship arises between the two parties. For a further in-depth discussion regarding the indicators for and against an employment relationship between Uber and driver partners please see HopgoodGanim Lawyers’ latest BRR Media interview ‘Uber drives legal uncertainty’.
If the plaintiffs in these lawsuits are successful it is likely that Uber will be required to provide to their drivers, amongst other benefits, workers' compensation insurance coverage. Similar lawsuits filed in Australia may occur if and when ridesharing becomes legal.
The debate regarding Uber and the status of Uber drivers’ access to insurance coverage in Australia is likely to remain a hot topic for many months and years to come. HopgoodGanim Lawyers will keep you updated on the latest developments regarding this important aspect of the growing ridesharing industry in Australia.