LAW 3: Detailed Analysis of UBER's Legal Exposure to Driver Conduct

This report analyzes UBER's legal exposure concerning the actions of its drivers, focusing on the principles of agency law. It begins by defining agency and its core components, including the relationship between the principal (UBER) and the agent (drivers). The report explores different types of authority, such as actual express, actual implied, apparent authority, and ratification, and how they impact UBER's liability. It identifies circumstances under which UBER can be held responsible for its drivers' actions, including instances of apparent authority, misrepresentation, and vicarious liability. The report cites the case of UBER vs. Berwick (2015), which established the driver-employee relationship. Finally, it discusses the steps UBER has taken to mitigate its legal exposure, such as emphasizing prudent driver behavior and clarifying liability disclosures. The report concludes by providing a clear understanding of UBER's legal responsibilities in relation to its drivers' conduct.

Running head: LAW
Law
Name of the Student
Name of the University:
Authors Note:

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Table of Contents
The main principles of agency are as follows:...........................................................................4
The various circumstances in which UBER can be held liable for the actions of its drivers are
as follows:..................................................................................................................................6
Some of the steps taken by UBER to minimise its exposure to the actions undertaken by its
drivers are as follows:................................................................................................................6
Reference....................................................................................................................................8

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Memo
To:
From:
Date:
Subject: conducting evaluation of UBER’s legal exposure to the conduct of its drivers.
In this Memo an attempt is made to analyse the legal exposure of Uber due to the
behaviour of its drivers. Prior to understanding the basic principles of an agency some light
must be thrown on the concept of agency (Ross, 2015). The concept of agency is basically
based upon a special relationship or agreement between the principle and the agent. The heart
of the agreement is based upon the fact that there are certain actions which the agent can
undertake on behalf of the principle. It is one of the most common features that is being
increasingly found in today’s commerce. This is because it allows flexibility of operation as
one party can act on behalf of the other in his absence or with due delegation of authority.
UBER has established similar relationship with its drivers as they can enter into transaction
an agreement with the customers on behalf of the company (Davis, 2015).
It is important to note that the level of authority exercised by the agent on behalf of
the principle will determine the extent of liability the principle has to bear with respect to the
third parties. In general case the principle will be bound by only those actions of the agent
which are within his scope of authority (Ross, 2015). The authority may be actual i.e.
expressed or implied or apparent which means that the actions or words of the principle are
such that a third party may infer that a separate person has a right to act on their behalf.
It must also be noted that only the principle doesn’t have obligations or duties to fulfil
rather there are several duties which the agent must fulfil too. Some of the duties of the

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agents which ensure the sanctity and authencity of the decisions and actions undertaking by
him are as follows:
a) It his duty to follow the instruction of the principle.
b) He must act in person and not through someone else.
c) He must exercise due skill care and competence in carrying out his duties.
d) He must always act in good faith.
e) He must maintain the confidentiality at all times.
It can be seen and inferred that while UBER make use of the agents or drivers to conduct
its overall business it might release itself from obligations towards the third parties in case the
agents do not comply or breach their respective duties which are being entrusted on them by
the company (Anderson & Huffman, 2017).
Some of the important points relevant to the concept of agency are:
a) The agent will not incur any contractual liability in case of a valid contract being
entered between the principle and the third party.
b) The agent will be liable to the principle where the agent has breached the terms of the
agreement or has acted in a way that is negligent towards his duties.
c) If the agent has not disclosed the presence of a principle to the third party the agent
will be liable to the third party.
d) In addition to the above mentioned points the agents are liable to their principle in
respect of tortious acts which fall outside their scope of authority (Paul, 2017).
The main principles of agency are as follows:
a) Actual express authority:

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According to this principle the principle (Uber) enters into an explicit agreement with
the agent to perform or participate in a certain task for e.g. taking orders from the
customers for the drivers about where to pick and drop them.
b) Actual implied authority:
According to this principle the principle enters into a certain explicit agreement with
the agents (drivers) that in certain cases though the authority has not been transferred
to the agents specifically they can infer that the authority for that action or transaction
has been delegated to them (Gould, 2017).
c) The principle of apparent authority:
According to this principle the principle has no agreement with the agents rather the
third party in this case the customers. This principle states that though the agreement
is between the agents i.e. the drivers and customers to carry the passengers from one
place to another there are certain scenarios wherein the driver cannot disobey the
principle (Uber). For instance if the company instructs it to take another route due to
bad road condition or traffic jams in the route, the driver cannot disobey the
instructions as he is under an apparent agreement with the company.
d) The principle of ratification:
Under this principle the company will be held liable for the actions of the agent or
driver for which the authority was not delegated to him but after obtaining the
knowledge about his actions they were ratified by the company (Hemel, 2017). For
e.g. the driver drops the customer at a particular location without taking due
permission from the company but, later on conveys the information to the company
and the same is being ratified by the company. In this case the company is binding
towards the action of the drivers as it has ratified the same.

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The various circumstances in which UBER can be held liable for the actions of its
drivers are as follows:
a) When the actions performed or the decisions taken by the drivers were within the
scope of their apparent authority.
b) If the drivers indulge in some kind of misrepresentation or fraud while staying within
the limits of his apparent authority.
c) In case of vicarious liability has arisen on the part of the company. Vicarious liability
states that there must exist a functional relationship between the defendant and the
wrong doer to justifiable establish that the defendant is liable to the claimant for the
damages done by the wrong doer (Davis, 2017). It was held in the case of UBER vs.
Berwick 2015 that the drivers of the UBER are employees and not independent
contractors thus there is a fundamental relationship between the principle and the
agent which is justifiable in holding UBER as responsible for any wrong doing of the
drivers (Keeton, 2016).
Some of the steps taken by UBER to minimise its exposure to the actions undertaken by
its drivers are as follows:
a) The implementation of the thought process that when the drivers are faced with an
ostensible task they must prudently which is in confirmation to their conscience
especially if the matter seems to be true.
b) UBER is liberalising its authority over the decisions taken by its drivers in case of an
emergency like taking a road accident victim to the nearby hospital without the prior
permission of the company (Qian, 2016).
c) The company is trying not to limit its liability towards its agents and drivers and
involve itself in handling the cases of the third parties without making its drivers
liable unless they expressly decide to be held liable (Conk, 2016).

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d) The company has expressly conveyed and have portrayed disclosures saying that if a
person is booking a cab via UBER he is releasing the company from any liability or
damage he might incur with respect to the actions of the third party driver (McPeak,
2016). Clauses may differ area wise but the theme of the clause remains same that the
company should not be held liable in case the passenger suffers any sort of damage
while travelling by the cab driven by one of the employees of the company.
It is expected that the above memo has been able to provide a clear understanding of the
legal liability of the company.
Thanking You

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Reference
Anderson, M., & Huffman, M. (2017). The Sharing Economy Meets the Sherman Act: Is
Uber a Firm, a Cartel, or Something in Between?.
Conk, G. W. (2016). Deadly Dust: Occupational Health and Safety as a Driving Force in
Workers' Compensation Law and the Development of Tort Doctrine and
Practice. Rutgers UL Rev., 69, 1139.
Davis, J. (2015). Drive at Your Own Risk: Uber Violates Unfair Competition Laws by
Misleading Uberx Drivers about Their Insurance Covergae. BCL Rev., 56, 1097.
Davis, R. W. (2017). U.S. Patent Application No. 14/822,375.
Gould, W. (2017). The Future of the Gig Economy, Labor Law, and the Role of Unions: How
Will They Look Going Forward?.
Hemel, D. J. (2017). Pooling and Unpooling in the Uber Economy. U. Chi. Legal F., 265.
Keeton, R. B. (2016). An Uber Dilemma: The Conflict between the Seattle Rideshare
Ordinance, the NLRA, and for-Hire Driver Worker Classification. Gonz. L. Rev., 52,
207.
McPeak, A. A. (2016). Regulating Ridesharing Platforms Through Tort Law. U. Haw. L.
Rev., 39, 357.
Paul, S. M. (2017). Uber as For-Profit Hiring Hall: A Price-Fixing Paradox and Its
Implications. Berkeley J. Emp. & Lab. L., 38, 233.
Qian, X. (2016). How newspapers present Uber's government relations in three countries:
US, UK and China.

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Ross, H. (2015). Ridesharing's House of Cards: O'Connor V. Uber Technologies, Inc. and the
viability of Uber's labor model in Washington. Wash. L. Rev., 90, 1431.
Ross, H. (2015). Ridesharing's House of Cards: O'Connor V. Uber Technologies, Inc. and the
viability of Uber's labor model in Washington. Wash. L. Rev., 90, 1431.