In gig economy, individuals take risk in hiring 'independent contractors' who lack employer backing

While the disruptive gig economy went gangbusters in the past several years, recent reports show a leveling off, and even a drop in some service areas, as the mainstream economy roars back to life and gig workers seek predictable employment and employer-provided benefits. In an interesting turn, another impact of the gig economy is coming to light as the sector matures, according to A. Vince Colella, a founding partner of Moss & Colella, P.C., a Southfield-based law firm specializing in personal injury and civil rights.

"While much of the conversation on the gig economy has focused on those engaged in providing app-based gig services such as ride hailing or home-based tasks, what has been under-reported is the difficulty for individuals who have been injured or killed as a result of interacting with a gig worker to use legal avenues for pursuing justice," Colella said.

The focus for gig workers who have sought to be recognized as employees rather than independent contractors is their desire for employer-provided insured and paid-time off benefits, training and other employer-provided perks. Similarly, when someone hires a gig service such as Lyft or Task Rabbit, they want the protections of the larger employer, rather than the risks of having an independent contractor drive them from A to B or assemble furniture in their home. Many users of the gig economy don't understand that they may be forfeiting those protections when they use a service.

"Just last week, the Ninth Circuit affirmed that Uber drivers could not sue Uber in a class action lawsuit. As independent contractors, the court ruled they couldn't be certified as a class; instead, they have to pursue their claims as individuals through arbitration," Colella said. "As independent contractors, they don't have employer protections and neither do the people that use their services and want restitution when something goes awry."

In his experience, Colella said cases against gig workers tend to go to the insurer of the individual; for example, the driver's insurance in the case of an accident or even an assault.

"An individual making a case against a gig worker is unlikely to receive the type of financial remuneration for pain and suffering that could be garnered in a case against an employee in a traditional organization," Colella said. "The lesson here really is the inherent risk when individuals hire a gig economy worker."

In Michigan, the Michigan Limousine, Taxicab and Transportation Network Company Act defines ride-hailing service drivers working for Uber, Lyft and other networks as independent contractors, and went into effect March 21, 2017.

"The implication of this statute is a strict prohibition on suing Lyft or Uber or another ride sharing service should you become injured as a result of the driver's conduct," Colella said.

Published: Wed, Oct 10, 2018

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