Regulating Ridesharing Through Tort Law

Abstract

As the sharing economy digs its heels in to the American mainstream, it turns the existing regulatory structure on its head. But the law needs to both facilitate innovation while balancing countervailing concerns like safety and cost allocation. While finding the best way to regulate ridesharing platforms is important, tort law plays a crucial, complementary role as well. On the regulation side, regulators need to craft meaningful rules that promote fairness across the industry – to both sharing economy actors and traditional enterprises. But comprehensive federal regulation under the new Trump administration seems like an unlikely solution. And local regulators run the risk of unnecessarily burdening the sharing economy through barriers to entry or other anti-competitive or onerous regulatory schemes.

Tort law is thus a critical legal tool, and the main focus of this article. While regulations provide prospective limits that may stifle innovation, tort law, on the other hand, addresses retrospective harms and deters future bad conduct. Allowing tort law to provide solutions may be key to preventing over-regulation while still promoting fairness. Thus, while propositions to fix the regulatory piece of the puzzle certainly have merit, tort law is also an important aspect to consider.

This article builds off of longstanding cases dealing with taxi or other transportation services and concludes that tort law is already able to handle the seemingly unique liability concerns arising from ridesharing platforms. In particular, it focuses on vicarious liability doctrines, like joint enterprise liability, as the means for achieving important regulatory goals through the tort system. By using tort law to address some of the concerns surrounding the sharing economy, important objectives can be achieved without risking over-regulation.

Keywords: Tort, Tort Theory, Vicarious Liability, Joint Enterprise, Sharing Economy, Gig Economy, Uber, Lyft, Regulation

JEL Classification: K2, K13, K23, K32, K42, K49, L5, O35, R4