Uber: The ride-hailing app that says it has ‘zero’ drivers

SAN FRANCISCO - Uber contract drivers helped bring in more than three-quarters of the company's revenue in this year's first six months. But as Uber would have it, the drivers aren't essential.

Uber raised eyebrows last month when its chief lawyer asserted "drivers' work is outside the usual course of Uber's business," in a call laying out the company's resistance to a California bill that would alter the employment status of many gig workers. But in fact it's a legal strategy the Silicon Valley firm has been honing for years that helps it avoid responsibility for the actions of its drivers.

Documents and a 2017 deposition related to an Atlanta civil suit, Jessicka Harris v. Uber, viewed by The Washington Post, offer a rare glimpse into Uber's strategies for using drivers' independent contractor status as a legal shield. Asked in a document to "admit or deny that Uber is in the business of providing transportation," the ride-hailing firm's attorneys are steadfast: "denied."

Over the course of a nearly three-hour deposition in the Harris case, Uber executive Nicholas Valentino, then an operations manager for Atlanta, repeatedly corrected the plaintiff's lawyer when he referred to the contractors as "drivers."

"They are not Uber drivers," Valentino said. "They're independent, third-party transportation providers." He repeated the claim no fewer than 16 times, to the attorney's apparent consternation.

"If you are going to keep saying they are not drivers, we are just going to be fussing about that all afternoon," said the attorney, Michael Todd Wheeles.

"That's OK," said Valentino.

Uber in a given year faces many lawsuits ranging from fender benders to wage disputes to more serious incidents. Harris sued Uber and driver Robert Ferguson, alleging that she nearly lost her leg after being struck by Ferguson, who she claimed veered off the road.

At stake for Uber in its many court battles is the potential for millions in new liabilities if Uber is found to bear greater responsibility for the actions of its contract drivers, if they are reclassified as employees.

Many companies rely on contractors and gig workers. But what sets Uber and other ride-hailing companies apart is that its customers spend far longer with the drivers, en route to their destination, compared with, say, food delivery or dog-walking services. The ratio of contractors to direct employees is high: For Uber's roughly 4 million drivers, the company has 27,000 employees.

In public statements, Uber takes pains to show its collaborative relationship with drivers. CEO Dara Khosrowshahi refers to them as "driver partners," noting in an interview last October that "if you're going to call your drivers partners, then treat them like partners." It declared 2017 "the year of the driver" before it was embroiled in a series of corporate scandals. The company offered some drivers the chance to buy stock when it went public in May and it hosts regular forums where drivers can give feedback to executives.

"Drivers are independent contractors," Uber spokesman Noah Edwardsen said in a statement. "But that has never stopped us from making significant investments in safety. Safety will always be a long-term commitment for Uber and we will continue working to raise the bar to help protect everyone who uses our platform."

Gig workers earn money by performing tasks like delivering groceries, ferrying passengers or fetching prepared food, generally arranged by customers through mobile apps. Because they aren't full-time employees, they can log in to the app whenever they wish to work, but also have to pay themselves for things like fuel and health insurance.

A bill in Uber's home state that could require it to reclassify drivers as employees, with benefits like paid sick leave, could also open the company up to new liabilities, according to critics. Uber has pushed back against the bill, citing what it says may be the impact to drivers' flexible work schedule.

"Liability is one of the big unspoken-about issues here," said Lorena Gonzalez, a California state assemblywoman who crafted the bill, known as AB5, that would make many gig workers employees. "We want to ensure there's responsibility at the end of the day and that they are not just passing that along to someone else."

Edwardsen said "liability for safety incidents has simply never been part of [Uber's] arguments or strategy around AB5," and that "suggesting otherwise is wrong."

Uber declined to comment on the Harris case, which it settled out of court, or any other litigation. Attorneys for Harris also declined to comment, as did the driver's attorneys. Valentino, the Uber executive who was deposed in the case, declined through an Uber spokesman to be interviewed. Harris and Ferguson didn't respond to requests for comment.

Uber drivers' employment status has been challenged in multiple lawsuits, but Uber to date has avoided having to broadly recognize its gig workers as employees. Uber tends to favor settling individual cases out of court, rather than letting them go to trial, say attorneys who have brought suits against the company.

In materials related to the Harris case, sealed after the matter was privately settled, Uber attorneys and executives contend that the company is nothing more than a marketplace that happens to be used for arranging transportation. And its chief legal officer, Tony West, said last month that Uber's business is "serving as a technology platform for several different types of digital marketplaces."

But the company is more involved than many online marketplaces, such as e-commerce sites, including providing driving directions to drivers, setting fare rates and mandating punctuality and car type, among other criteria.

The distinction in the Harris case - and many others like it - is crucial for Uber because the company argues that as contractors, drivers and their behavior ultimately aren't its responsibility.

It has made similar arguments in other lawsuits. In a case in San Francisco alleging an Uber driver made sexual comments to a 16-year-old passenger, settled in December, Uber's attorneys said "the partner driver was an independent contractor responsible for his own means and methods" and that Uber is "a technology company, not a transportation company."

In a case underway in Walton County, Florida, where a driver purportedly drove a passenger to his home and raped her, Uber asserts the driver "was at all times . . . an independent, third-party transportation provider" and that Uber "does not and did not employ" the driver and "never had an agency, employment, partnership, joint venture or joint enterprise relationship with him."

Courts have generally sided with Uber and other firms reliant on gig workers which have made similar arguments.

The Post reported last month that Uber's Special Investigations Unit, which it turns to when trips go awry, is designed primarily to shelter the company from legal responsibility and quietly resolve serious allegations to avoid press or regulatory scrutiny. Uber has contested that, saying the unit's role is to "provide specialized customer support to riders and drivers dealing with very serious real-life situations."

Online marketplaces, such as Uber and Lyft, e-commerce companies, food delivery firms and lodging providers have successfully argued that as a middleman they shouldn't be held responsible for the goods and services they help arrange. And courts have generally sided with them, citing Section 230 of the Communications Decency Act, which shields sites from legal liability for user content by treating them as distributors rather than publishers.

Gonzalez, in an interview, said she is also considering a handful of new bills for the next legislative session that would address various aspects of the gig economy, including insurance considerations.

Seattle University law professor Charlotte Garden, who has studied gig economy labor, said the California bill could be copied in other states, increasing potential costs to Uber. She said that may require them to find new ways to describe their business.

"It's part of Uber's playbook is to use colorful language to obscure the true nature of their business," said Garden.

In the Harris case, Uber executive Valentino is asked if he knows how many drivers Uber has in the state of Georgia. "Zero, would be how many Uber drivers, because that's not what they are," he said. "But, if you are asking about independent third party transportation providers - not trying to be difficult - I would say, no, I don't know the answer."

"Isn't it true that Uber drivers like Mr. Ferguson are commanded to transport the Uber customer directly to their specified destination?" asked attorney Wheeles, of Morris Haynes & Hornsby in Birmingham, Ala.

“He is not an Uber driver,” said Valentino, correcting Wheeles. “Independent third-party transportation provider.”