ON THE ALLOCATION MECHANISM OF CIVIL LIABILITY IN ONLINE RIDE-HAILING TRAFFIC ACCIDENTSI. THE RISE OF THE PROBLEMII. THE IDENTIFICATION BASIS OF CIVIL LIABILITY IN THE TRAFFIC ACCIDENT OF ONLINE RIDE-HAILINGA. The Theory of ‘Operation Control, Operation Interests’
B. Preliminary Justification that the Platform Assumes the Civil Liability
III. IDENTIFICATION OF THE EMPLOYMENT RELATIONSHIP BETWEEN THE ONLINE RIDE-HAILING PLATFORM AND THE DRIVERA. The Determination of the Legal Status of the Platform and the Driver
B. Confirmation of ‘Labor Relationship’ or ‘New Labor Relationship’
IV. THE ALLOCATION OF CIVIL LIABILITY IN ONLINE RIDE-HAILING TRAFFIC ACCIDENTSA. The Allocation of Liability for Damage to Passengers Caused by the Behavior of Online Ride-hailing Drivers
B. The Tort Liability for Third Person Damage Caused by the Behavior of Online Ride-hailing Drivers
C. The Third Person Directly Infringes on the Passenger: The Supplementary Liability of the Platform Is Based on Shared Liability + Supplementary Protection
D. Allocation of the Liability that the Third Person Directly Infringes on the Driver
V. THE SEAMLESS CONNECTION BETWEEN TORT LIABILITY AND LIABILITY INSURANCE IN ONLINE RIDE-HAILING TRAFFIC ACCIDENTSUnder the mode of Premier and Express, the online ride-hailing platform has become a real transportation service provider by applying the identification standard of ‘operation control, operation interests’. The online ride-hailing platform can obtain income from each online ride-hailing order, review the operation qualification of drivers, train and improve their operating capabilities, and establish the mechanism to quickly discover and deal with abnormal situations. The relationship between the online ride-hailing platform and the driver can be divided into the labor relationship and new labor relationship according to the mode of Premier and Express. If passengers suffer damage due to traffic accidents caused by the online ride-hailing driver, the platform is the primary responsible person in both modes. The platform has the right to indemnification against the driver who has intentional act or gross negligence after assuming the responsibility. If the traffic accident infringes on the rights and interests of passengers due to acts performed by the third person, the platform shall assume the supplementary liability, which is based on shared?liability and the supplementary guarantee procedure in essence. At present, both the platform and the driver should purchase commercial insurance. Usage-based insurance has been technically compatible with the time-sharing and segmented operation mode of online ride-hailing, to realize the seamless connection between the tort liability of the platform and driver, and the liability insurance.I. THE RISE OF THE PROBLEMIn recent years, the sharing economy has been growing and developing around the world based on the ever-changing network science and technology. As one of the typical representatives of the sharing economy, the online ride-hailing platform has effectively improved the supply-demand matching and operational efficiency of taxi services. While the influence of the online ride-hailing platform is expanding, it challenges the economic order and even the legal order of the traditional industry. The Interim Measures for the Administration of Online Ride-hailing Business Operations and Services (hereinafter referred to as the Management Measures for Online Ride-hailing) was implemented on November 1, 2016 and revised in November 2019. The specifications focus on online ride-hailing platform companies, the qualifications of online ride-hailing entities, operating behaviors and related administrative penalties. However, the relevant provisions on civil liability only point out that the online ride-hailing platform company assumes the carrier’s liabilities. In the civil trial, the court should not directly make the platform company assume vicarious or joint and several liability liability based on administrative regulatory documents, because civil relations can only be adjusted by relevant civil laws, and administrative regulatory documents generally cannot be arrogated. The departmental rules of the State Council and the regulatory documents cannot be directly used as the basis for the judgment of tort liability, but they are the important reference factor for judges to exercise their discretion. The Road Traffic Safety Law and other traditional laws and regulations lack specificity and applicability to online ride-hailing as an emerging economic form, and lack standards for determining the relationship between online ride-hailing platforms and drivers, and fail to uniformly stipulate the distribution and undertaking of civil liability in online ride-hailing traffic accidents. Paragraph 2 of article 38 of the E-Commerce Law, which came into effect on January 1, 2019, only stipulates that the online platform shall assume the ‘corresponding liability for compensation’, but there is no clear stipulation as for the specific liability. If applying to article 1198 of the Civil Code on the failure of the administrator of public places or the organizer of mass activities to ensure safety by analogy, the online ride-hailing platform shall assume the supplementary liability if the acts performed by the third person cause damage to passengers; When there is no infringement of the third person, the online ride-hailing platform bears direct tort liability. It is worth pondering whether the civil liability allocation mode in the ride-hailing traffic accidents conforms to the concept of fairness and justice and the reality of sharing economy.The ambiguity or even lack of civil liability regulations has led to different judgments on the liability of online ride-hailing platforms and drivers in different regions and levels of courts in similar situations after the online ride-hailing traffic accident cases enter into judicial procedures. At present, traditional taxis also rely on the information service provided by online ride-hailing platforms as a way of operation. There have been labor relations, affiliation relations or cooperation relations between traditional taxi drivers and their companies or affiliated companies. However, the relationship between online ride-hailing platform companies and taxi companies is the information service relations, and the counterparty of the travel service contract signed with the passenger should be the taxi company rather than the platform. When a traffic accident occurs in the operation that causes damages to consumers, the taxi company shall bear the compensation liability, and the vehicle holder shall be identified as the taxi company rather than the online ride-hailing platform, which is not controversial in both theory and practice. Therefore, the following part of this paper mainly discusses the civil liability allocation mechanism in the traffic accidents of online ride-hailing under the mode of Premier and Express. The research approach is as follows: the author mainly studies the employment relationship between the online ride-hailing platform and the driver from the perspective of the theory of ‘operation control and operation interests’ and the allocation of civil liability in the traffic accident of online ride-hailing platform, and discusses the protection mode to combine tort liability and liability insurance.II. THE IDENTIFICATION BASIS OF CIVIL LIABILITY IN THE TRAFFIC ACCIDENT OF ONLINE RIDE-HAILINGAs a high-speed means of transportation, article 1208 of the Civil Code of China stipulates that: ‘Where a motor vehicle is involved in a traffic accident which causes damage, the liability for compensation shall be assumed in accordance with the relevant provisions of the law on road traffic safety and this Code.’ The law on road traffic safety refers to the Road Traffic Safety Law, and article 76 of the Road Traffic Safety Law is used most commonly for the allocation of liability, the imputation principle of which is a dual system. For the tort liability between a motor vehicle and a non-motor vehicle driver or a pedestrian caused by a traffic accident, the motor vehicle party shall assume no-fault liability within a proportion of 10 percent. If the motor vehicle party is at fault, the corresponding liability for the fault shall be superimposed; the liability for the fault shall apply to the tort liability caused by a traffic accident between motor vehicles.A. The Theory of ‘Operation Control, Operation Interests’When determining the road traffic liability, the standard of the liability subject is based on the uncontrollable risk that the high-speed motor vehicle brings to society. Article 7 of the Road Traffic Act enacted by Germany in 1907 stipulates that the vehicle holder shall be liable for damage to a person or property caused by the use with a motor vehicle, which states that the vehicle holder shall be liable for the peril. In addition, Germany also has compulsory motor vehicle insurance. According to article 3 of the Compulsory Motor Vehicle Insurance Law, the victim has the direct right to claim against the insurer. In the German law, the vehicle holder refers to a person who uses a motor vehicle for his own benefit and has the right of control and operation interests to the motor vehicle. On the other hand, Japan draws on the provisions of German law and puts forward the concept of ‘operation provider’, the meaning of which is consistent with the connotation of German vehicle holders and also takes ‘operation control’ and ‘operation interests’ as the benchmark for judgment. The operation control is not limited to the actual and direct control over the operation, but in the position to give instructions, management and control to the operation of the motor vehicle. Every country basically regards ‘actual control+operation interests’ as the criteria for identifying the vehicle holder. Both traditional legal theory and judicial practice recognize the double-standard theory of ‘operation control, operation interests’. Once a motor vehicle causes damage in a traffic accident, the civil subject who actually controls the operation of the motor vehicle and obtains the operation interests shall bear the liability for compensation. In China’s legislation and trial practice, the above-mentioned criteria for judging the ‘vehicle holder’ are essentially adopted.At present, the main criterion for identifying the ‘vehicle holder’ in China is the theory of operation control and operation interests. So, who is the ‘vehicle holder’ between the online ride-hailing platform and the driver? There is no doubt that the online ride-hailing platform has a certain degree of control over the operation of online ride-hailing. According to the current national regulations on online ride-hailing, the platform not only bears the management obligation for drivers, but also has a reasonable supervision obligation during the operation of online ride-hailing. Therefore, it can be determined that the platform has the dominant power over online ride-hailing. In terms of operation interests, although the driver directly obtains greater interests than the platform from each order, it cannot be ignored that the platform can obtain considerable profits from numerous online ride-hailing orders. In fact, the essence of business behavior of the platform is to provide transportation services, rather than software platform services. The software platform services of online ride-hailing platforms are basically free for online ride-hailing drivers and consumers. The main source of business income for platform companies is the transportation services provided by drivers. The reason why the platform assumes the liability is that it has the characteristics of operation control and intersts. Therefore, the platform is the ‘vehicle holder’. For example, in the civil judgment of the Nanjing Intermediate People’s Court, the court held that Hu could carry passengers for transportation, and the transportation behavior of the online ride-hailing driver came from the order dispatched by the online ride-hailing platform, which is a ‘dangerous operator’. In the course of transportation, the online ride-hailing platform company clarifies the destination for the online ride-hailing driver when dispatching, charges directly from the rider, pays a part of the fees to the ride-hailing driver, and dispatches the order based on the evaluation of consumers. As a result, the court believed that the online ride-hailing platform was in a position of ‘operation control’. At the same time, the court held that the online ride-hailing platform enjoys ‘operation interests’ by taking 20 percent cut of each trip cost. To sum up, the court held that the online ride-hailing platform company should be identified as the ‘party to the motor vehicle’ stipulated in article 76 of the Road Traffic Safety Law, that is, the ‘vehicle holder’. The online ride-hailing platform and the driver Hu should assume joint and several liability in the traffic accident case.B. Preliminary Justification that the Platform Assumes the Civil LiabilityTo determine the distribution of liability for damages in online ride-hailing traffic accidents, there are mainly the following bases: the first is the theory of compensation, namely the principle of ‘the one who enjoys the interests shall bear more risks’. The second is the theory of risk control, that is, the principle of ‘the one who can control and reduce the risk should assume more liabilities’. The third is the theory of risk sharing, that is, the online ride-hailing traffic accidents are risks arising with the development of modern Internet technology. Therefore, all members of society who enjoy modern civilization should share the damage. As a responsible entity, the platform’s ability to pay compensation is much stronger than that of the driver. In many cases, the platform can resolve disputes more effectively, and can be motivated to better manage the driver and reduce the occurrence of accidents. There are the legitimate reasons for the online ride-hailing platform to assume the liability for compensation as follows:First, the online ride-hailing platform has the ability to avoid damage to a certain extent, and can be presumed to be at fault by failing to perform the corresponding review obligations and disposal obligations in time. Online ride-hailing platform companies are the initiators and managers of ‘signing contracts online and performing contracts offline’, and the Internet + model of online ride-hailing enables the platform to have certain risk control ability, which can effectively review the vehicles’ drivability and the drivers’ qualifications in advance; they can review the consistency of drivers online and offline during the incident, guarantee the safety of additional services provided, and establish a mechanism for rapid discovery and disposal of abnormal situations; the data backup management system can be optimized and improved afterwards, allowing the platform to assume the risk liability for the damage to consumers and also promote the platform to increase investment in risk management and control behavior, and effectively reduce the occurrence of online ride-hailing traffic accidents. For example, one of the important reasons for the frequent occurrence of online ride-hailing traffic accidents is that the drivers are in a state of fatigue. Compared with other subjects, the online ride-hailing platform can efficiently and conveniently avoid risks with relatively small preventive costs. The platform company only needs to limit the daily working hours of each driver using the online ride-hailing software. Once the limited time is exceeded, the service of the online ride-hailing software will be disconnected, thus reducing the probability of accidents caused by drivers’ fatigue driving.Second, there is a legally relative causal relationship between the platform’s act of providing online ride-hailing services and the damage result. The criterion of relative causality is whether the behavior enhances the possibility of damage to the degree of relative causality. Relativity has different degrees, and the amount of liability should be adapted to the degree. The platform and the driver are the common cause of damage, and should also jointly prevent the damage. It is because the online ride-hailing platform has opened various operation modes that the passengers order and accept transportation services based on their trust in the online ride-hailing platform. Although there is no direct causal relationship between the services provided by the ride-hailing platform and the damage to the passengers, there is a relative causal relationship if personal injury or property damage occurs in the course of online ride-hailing transportation. For example, the behavior of online ride-hailing platform companies in violation of audit obligation or safety protection obligation is related to the infringement of online ride-hailing drivers, so they both constitute an inseparable whole and are the common cause of damage.Third, the platform company shall assume corresponding liability while obtaining interests. The online ride-hailing platform extracts certain fees from the driver’s order, and the platform’s operation income comes from the driver’s. Those who have benefited from engaging in for-profit affairs shall be liable for damages caused by the dangerous business behaviors.Fourth, the damage dispersion and insurance system. Those engaged in risky affairs generally have a strong ability to bear the damage compensation. The ‘deep pocket’ argument holds that business entities can transfer the risk to consumers through the price mechanism. The platform company has a relatively strong ability to bear damage compensation, and can take more rational considerations for purchasing commercial insurance. If the platform assumes the corresponding liability, then the risk can be concentrated on the platform. The platform company can transfer the risk to consumers and online ride-hailing drivers through the price mechanism (service charge pricing and the proportion of fees) to realize risk diversification.III. IDENTIFICATION OF EMPLOYMENT RELATIONSHIP BETWEEN THE ONLINE RIDE-HAILING PLATFORM AND THE DRIVERThe online ride-hailing can be divided into two modes according to the specific operation mode: Premier and Express. The carpool is different from online ride-hailing, which is the reciprocal aid and benefit among people for the purpose of sharing the fuel and road expenses (of course, drivers may also carry out ‘carpool’ business for profit). Strictly speaking, the carpool does not belong to the scope of online ride-hailing as defined in article 2 of the Interim Measures for the Administration of Online Ride-hailing Business Operations and Services, so it will not be discussed in this paper. We will discuss the nature of the employment relationship between the online ride-hailing platform and the driver under the mode of Premier and Express below. In the civil cases of ride-hailing traffic accidents, although a party generally lists the platform company as the defendant, the court regards it as the ‘middleman’ role in the intermediary contract in many cases. In addition to the burden of proof factor, the platform has not been determined as the employee to assume the liability, which indirectly denies the carrier’s liability of the online ride-hailing platform in the transportation service contract substantially. In judicial practice, the court generally determines the liability based on the accident certificate issued by the traffic police department, while the accident certificate only specifies the person directly involved in the accident. In traditional traffic accidents, the liability of the employer, the affiliated party, and others are determined only after the traffic accident case is filed to the court. The court will ascertain the relationship between the perpetrator and his employer or affiliated party, etc., and then make a judgment based on the ascertained facts. Therefore, it is difficult to directly attribute the fault of the accident to the online ride-hailing platform based on the accident certificate of the traffic police department. Only after the court ascertains the basic facts about the employment relationship between the online ride-hailing platform and the driver, can the online ride-hailing platform assume the liability.A. The Determination of the Legal Status of the Platform and the DriverWhether the online ride-hailing driver is an employee or an operator of the platform is still controversial. In the case of Berwick v. Uber Technologies Inc., the California Labor Commissioner’s Office admitted a former Uber driver as an employee. The online ride-hailing company claims to be a technology platform that connects the driver and the passenger, and the driver should legally be the operator of the platform. In the legal document and litigation procedure, Uber considers being a technology company that has created a market connecting the passenger and the driver. Uber claims that it does not take any responsibility for the actions or faults of drivers. The driver, as the platform’s operator, directly establishes a contractual relationship with the passenger. But this is not the case. The person who works on the platform actually seems to live in a gray area between being the employee and the operator. The passenger may have various complaints against the driver, including poor route choice, unsatisfactory vehicle conditions etc., but Uber says that the passenger shall file the legal claim against the driver rather than the company. At the same time, Uber assumes expectations of the passenger regarding the safety and reliability of the driver, advertising that it provides ‘a journey you can trust’, including the driver background check, driver ratings, insurance and round-the-clock support. Whether the online ride-hailing driver can be classified as the operator of the platform is crucial. If the driver is considered to be an employee of the platform, the platform as an employer shall assume the vicarious liability; if the driver is an operator of the platform, he shall directly assume the liability for personal injury and property loss of the passenger, and the platform only assume the liability of the intermediary. In addition to considering the main characteristics of profitability, the definition of the operator also needs to take the independence of behavior subjects into account. The operator is an independent business entity engaged in the business operation with its own name, trade name, or an individual who exists as a natural person, which are essentially different from laborers in the legal concept. In the mode of Premier and Express, the online ride-hailing driver is not engaged in the transportation service as a contractor, but in the name of the platform. The platform company not only provides information intermediary services, but also initiates online ride-hailing transactions and obtain more benefits. The platform company can control the operation and service behavior of the driver to a certain extent. The passenger makes contract with the platform company rather than the driver. Therefore, the online ride-hailing driver is not the in-platform operator. Compared with the driver, the platform should be the operator of transportation services.B. Confirmation of ‘Labor Relationship’ or ‘New Labor Relationship’The current judgment standard of labor relationship cannot fully adapt to the actual situation of online ride-hailing employment, so we must introduce new judgment factors on the basis of existing law. If online ride-hailing drivers are fully identified as employees and enjoy all the benefits of laborers, the online ride-hailing platforms will bear additional burdens such as taxes and insurance, and the huge additional cost will be a devastating disaster for the platform companies. According to whether the drivers work part-time or full-time, they can be divided into part-time and full-time online ride-hailing drivers. Part-time online ride-hailing drivers refer to those who establish informal employment relations with the online ride-hailing platforms after having established formal labor relations with employers. Full-time online ride-hailing drivers refer to those who have only established employment relations with one or more online ride-hailing platforms. Full-time employment is divided into several different situations: First, some online ride-hailing platforms require drivers to exclusively access their own platforms and clearly specify the working hour, remuneration, assessment method, and pay social insurance for the drivers. This type of employment is undoubtedly a labor relationship. Second, although some online ride-hailing platforms require drivers to only access their own platforms, they do not sign the labor contract with drivers and do not stipulate specific working hours. Drivers can decide the working hours on their own will and the platforms will charge a certain percentage of fees based on the orders provided for the drivers. Third, the online ride-hailing drivers can decide to access several platforms by themselves, and often sign contracts with leasing companies and labor dispatch companies rather than directly with each platform. This employment model is also complicated, and the relationship between online ride-hailing platforms and drivers cannot be generalized. For example, Didi uses a ‘four-party agreement’ adding the car rental company and labor service company to separate the employment relationship between the platform and the driver. The so-called ‘four-party agreement’ means that the four parties, which includes the online platform company, the car rental company, the labor dispatch company, and the driver, sign an agreement to regulate each other. The four-party agreement determines the rights and obligations of the related parties, but in fact the platform controls and manages the entire process of employment. This situation confirms that the platform and the driver are in the category of a new type of labor relationship.The labor relationships currently protected by the Labor Contract Law of China mainly include the following types: typical labor relationship with strong subordinate nature, labor dispatch relationship, and part-time employment relationship. In the era of Internet +, the labor relationships reflect the characteristics of diversification and flexibility, and the subordinate nature tends to weaken. It is necessary to add a new type of labor relationship. In the game between the platform operator and the driver, the platform is more powerful, while the driver is often in a relatively weak position. Appropriate protection methods should be adopted for the intermediate type of new labor relationship. The relationship between drivers and online ride-hailing platforms should be considered as a new type of labor relationship, which is different from the traditional labor relationship. First, the labor relationship between the online ride-hailing platform and the driver is different from the labor relationship with strong personal subordination in the traditional form, which is a new type of dependent labor relationship. The operation of drivers to carry passengers must be dependent on the platform. However, this kind of labor mode in which drivers take orders independently with flexible working hours and the platform collects a certain commission weakens the driver’s personal subordination to the platform; Second, drivers need to follow the rules and regulations of the online ride-hailing platforms. In other modes formed by the online ride-hailing platform through unilateral or multi-party agreements, the online ride-hailing platform and the driver also constitute a ‘new type of labor relationship’ as mentioned above (see Table 1).Table 1: Identification of Different Business Models and Employment Relations of Online Ride-hailing![]()
According to the platform’s management of drivers, income sharing, full-time or part-time employment and other factors, a labor relationship that combines ‘typical labor relationship’ and ‘new labor relationship’ is constructed. A feasible way is to perform technical processing on the social insurance accounts of part-time drivers, so that each employer can contribute to the social insurance accounts of part-time employees separately. Meanwhile, the platform only needs to bear the payment amount that matches the part-time working hours, reducing the platform’s labor cost. Recently, the British Supreme Court has ruled that the Uber drivers are employees. The judge accused Uber of requiring its drivers to conclude controversial contracts, saying that these contracts ‘can be seen as obstacles that prevent drivers from claiming the rights of employees under the applicable laws.’ The ruling stated that Uber must treat the drivers as employees from the time they log into the Uber app to the time they log out. The employees have more rights than the self-employed, but fewer rights than the formal employees of enterprises. For example, the latter have the right to get maternity leave wages and oppose unfair dismissal. Of course, more legislative innovations are needed to effectively protect the legitimate rights and interests of online ride-hailing drivers. For self-employed workers such as online ride-hailing drivers emerging in the sharing economy, the legal subject status of ‘quasi workers’ shall be clearly defined in the labor law with a lower social security standard than ordinary workers.