Liability Exposure

Uber for Business: More Dangerous Than We Realized

Businesses are partnering with rideshare platforms to arrange transportation for customers and colleagues. But they're underestimating liability risks.
By: | December 1, 2018 • 4 min read

There’s no arguing with the advantages of ridesharing over more traditional options like public transportation, taxis or contracted bus services. Convenient, clean and cost-effective, the Ubers and Lyfts of the world (deemed transportation network companies, or TNCs) are the primary way many people get from point A to point B.

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Businesses and organizations recognize that, too and are increasingly partnering with rideshare platforms to offer the transportation service to customers and colleagues. However, risk managers could be underestimating the additional liability exposures created by these partnerships.

Despite their benefits, on-demand ride hailing apps may not be the best fit for every purpose. At the very least, organizations should consider how partnering with a rideshare platform impacts their liability exposure.

Cyber and Privacy Liability

“Protection of PII (personal identifiable information) is the nuance that doesn’t exist with other types of transportation,” said Thom Rickert, VP and emerging risk specialist at Trident Public Risk Solutions.

Thom Rickert, VP and emerging risk specialist at Trident Public Risk Solution

Integrating with a rideshare platform creates another point of entry into a company’s corporate network. This exposes confidential company data to theft and increases vulnerability to a malware attack.

In 2017, Uber launched a B2B platform — Uber for Business — designed to allow companies to manage rides taken by their employees or ordered for customers or partners. The program allows approved rides to be automatically charged to the company account and provides detailed records of who took the ride, to where and at what time. By linking directly to a corporate account, the platform exposes business users to direct financial theft.

According to an August 2017 report from cyber security firm Appthority, Uber updated its platform at the end of 2016 and did away with an encrypted connection to transmit data.

“It’s unclear why Uber removed SSL support and important to note that not using proper data encryption during network transmission may lead to man-in-the-middle attacks or the disclosure of important information to unintended parties,” the report said.

Companies partnering with rideshare platforms need to “review safety protocols that are built into the applications and understand how the transportation company maintains security of their own data,” Rickert said. That means knowing whether they manage PII themselves or outsource data storage and security to a third party. In either case, businesses should “determine whether the rideshare provider’s data protections align with their own expectations around how to handle PII.”

“The potential cyber liabilities for corporate accounts with TNCs are no different than for any other entity which has a legal obligation to protect its employees or clients’ personal identifiable information,” said Robley Moor, senior key account manager, Swiss Re Corporate Solutions.

“Also, a TNC account is a not an obvious ‘backdoor’ to a corporate server where employee data lives. If a TNC’s network security weakness is exploited to get available corporate customer data, their liability is probably clear.”

Liability for Bodily Injury

Neither Uber nor Lyft has a sparkling record when it comes to properly vetting its drivers. A 2018 CNN investigation found that in the past four years, at least 103 Uber drivers and 18 Lyft drivers in the U.S. have been accused of sexually assaulting or abusing passengers.

Each company conducts criminal background checks on drivers, but it’s not known how extensive or thorough they are.

Ann Myhr, senior director, Knowledge Resources, The Institutes

“Laws and regulations around driver certification vary based on municipality, state, etc.,” said Ann Myhr, senior director, Knowledge Resources, The Institutes.

Business users have no control over the vetting process. This applies not just to a driver’s criminal history but also his or her behavior behind the wheel. This is where contractual review becomes critical.

“Read the terms of service. What is the rideshare company obligated to do when it comes to screening drivers and ensuring safety? What are your obligations as the user? What are the consequences when obligations are broken; where does the liability fall? There has to be a level of verification, validation and consistent monitoring to make sure the terms of that contract are being fulfilled,” Rickert said.

If an employee-passenger picked up for a business-related ride gets injured, they may include their employer in a lawsuit along with the transportation company, alleging that the employer was negligent in its selection of a vendor with unsafe hiring practices, thus exposing riders to risk.

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Most states require rideshare providers to carry $1 million in auto liability limits, but where regulations are unclear, or if damages exceed that amount, employers dragged into a lawsuit could have a hard time finding recovery.

“Most personal auto policies specifically exclude livery exposures and do not provide coverage for carrying passengers for a fee,” Myhr said.

“Even when TNCs provide commercial auto coverage, there are always potential gaps between the commercial policy and personal policy. And coverage limits for personal policies are generally much lower than for commercial policies.”

“In a bad accident, plaintiffs will look to attach liability to the deepest pockets available, which means the TNCs or the employer/arranger,” Moor said.

Workers’ Compensation

If an employee is attacked or otherwise injured during a ride arranged through their employer, they may be entitled to workers’ comp benefits.

Robley Moor, senior key account manager, Swiss Re Corporate Solutions

Some states’ “coming and going” rules bar compensation for injuries incurred while driving to or from work, but the fact that the car in question was arranged via a company-sponsored transportation platform could alter the equation.

“The law always lags behind technology,” Moor said.

“Courts have not yet considered the issue of workers’ compensation claims or tort liability for a company ‘arranging the use’ of a ridesharing service by others. ”

According to a June 2018 article in The Legal Intelligencer, three exceptions to the coming and going rule include:

  1. The employment contract includes transportation to and from work.
  2. The claimant is on a “special assignment or mission” for the employer; or
  3. Special circumstances are such that the claimant was furthering the business of the employer.

If a court decides that these exceptions apply and such claims are deemed compensable, that will increase the workers’ comp exposure. &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]