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Can Uber and Lyft Drivers Receive Workers’ Compensation?

Posted on May 22, 2024 in Car Accidents

If you drive for Uber or Lyft in the State of California, you may wonder whether you can seek financial compensation for an on-the-job injury. Historically, Uber and Lyft drivers in California have been classified as independent contractors, not employees. This difference has barred rideshare drivers from being covered by workers’ compensation insurance. However, new laws in California are working to change this.

does workers comp apply to rideshare services

The Rights of Independent Contractors vs. Employees in California 

Since the advent of transportation network companies, there has been controversy regarding driver classifications. In the past, state law in California has permitted rideshare companies to classify their drivers as independent contractors rather than employees.

Treating Uber, Lyft, DoorDash and Instacart drivers as independent contractors effectively prevents these companies from having to give their drivers employment benefits. This includes workers’ compensation insurance coverage, which can pay for an employee’s medical bills, partial lost wages and disability in the event of occupational injuries or illnesses.

California’s Laws Are Changing for Gig Workers

In 2020, the State of California contested the classification system used by rideshare and other app-based companies and took civil action to order them to reclassify their workers as employees rather than independent contractors. Rideshare companies responded by sponsoring Proposition 22, which was placed on the ballot for the November 3, 2022 election.

Prop 22 presented an initiative to constitutionally define app-based workers as independent contractors. This would make these workers ineligible for certain benefits, including workers’ compensation coverage. After gig companies spent a record $224 million to support the initiative, Prop 22 passed with a 58.63 percent “yes” vote and became law.

Now, almost four years later, the California Supreme Court is hearing oral arguments in a case that could throw Prop 22 out. This comes after a Superior Court judge invalidated Prop 22 in 2021 and gig companies successfully appealed this decision in 2023. If the law is thrown out now, it could affect over one million gig economy workers living in California.

Who Pays for an Uber or Lyft Driver’s Injuries After an On-the-Job Accident?

As of May 2024, Proposition 22 remains in effect in California. Under this law, rideshare companies must provide “loss and liability protection” to their drivers. This is a type of occupational accident insurance that can pay for medical expenses and lost wages if a worker is injured during work-related activities, such as a car accident.

If an Uber or Lyft driver gets hurt while logged into the rideshare app in California, the company must cover the driver’s medical expenses up to a minimum of $1 million. The company must also pay disability amounts equal to 66 percent of the driver’s average weekly earnings from all network companies, with minimum and maximum weekly limits.

However, unlike workers’ compensation, loss and liability protection does not extend to occupational illnesses. This is a significant disadvantage to rideshare drivers amid the ongoing COVID-19 crisis. If Uber or Lyft drivers get sick on the job, a gap in the language of Prop 22 means no benefits are available for their medical bills or missed work.

Protect your rights as a rideshare driver in California by hiring an Uber/Lyft accident attorney in Los Angeles if you get injured on the job. An attorney from Rose, Klein & Marias LLP can help you navigate the state’s evolving laws to fight for maximum financial compensation on your behalf.