Uber loses 2nd bellwether trial, faces over 3,000 assault lawsuits

A federal jury in North Carolina found Uber Technologies, Inc. (NYSE: UBER) liable for assault by one of its drivers, the second consecutive loss for the company in a series of bellwether trials that could shape the legal and financial consequences for over 3,000 similar claims. The jury awarded the plaintiff $5,000 in damages for the 2019 incident.

"This was a case that they thought going in that they were going to win," Ellyn Hurd, one of the plaintiff's lawyers, said. "They picked all the criteria — this is the case that they picked, that they wanted to try. And the jury believed the plaintiff and they lost."

The verdict contrasts with a prior bellwether outcome in California where a jury found Uber not liable, but it follows a February decision in Arizona where the company was ordered to pay $8.5 million to another victim. In a statement, Uber highlighted the small award in the North Carolina case, stating it "should further bring these cases back to reality" and noted the company has strong grounds for an appeal.

At stake for Uber is a legal firewall it has long maintained: that its drivers are independent contractors, shielding the company from liability for their conduct. That defense was dismantled by U.S. District Court Judge Charles R. Breyer, who is presiding over the consolidated lawsuits. He ruled that under North Carolina law, Uber acts as a "common carrier," making it directly liable for the safety of its passengers.

The "Common Carrier" Ruling

Judge Breyer's finding that Uber is a "common carrier" is a significant blow to the rideshare giant's legal strategy. The classification means jurors in the North Carolina case only had to decide if the assault happened, not whether Uber itself was negligent. Breyer noted that Uber holds itself out to the public as a transportation provider and that North Carolina, unlike states such as Florida and Texas, has not explicitly exempted rideshare companies from this form of liability. This precedent could simplify the path for thousands of other plaintiffs in the multidistrict litigation.

A Pattern of Allegations

The bellwether trials are only the most visible part of a much larger legal challenge facing the company. New lawsuits continue to emerge, including a March complaint in Redwood City, California, where a woman alleges she was raped by a driver in 2018. In another recent case, a driver in Arvada, Colorado, turned himself in on charges of sexual assault in January after driving away with an intoxicated passenger. These cases highlight a persistent pattern of safety-related incidents that continue to plague the platform, creating significant reputational and financial risk as the thousands of pending lawsuits proceed.

This article is for informational purposes only and does not constitute investment advice.