Since the beginning, ride-sharing has been a complicated issue. At first there were  issues with drivers using their personal autos for business use; many drivers did not understand that what they were doing was excluded under their personal auto policy. It took some time for the industry to adapt and make it clear when coverage fell under the personal auto, when there was no coverage under the personal auto, and when coverage fell to the Transportation Network Company (TNC). Carriers began developing endorsements and coverage specifically for ride-sharing, especially as some states passed legislation requiring coverage to be provided during any gap periods.

Then, it became a matter of whether or not the drivers were employees of the TNC, or whether they were independent contractors. The drivers wanted to be considered employees in order to receive increased pay and benefits, while the TNCs maintained that the drivers were not their employees, the drivers were simply using the service provided by the TNC to match them with potential passengers. This is an ongoing issue; yesterday the California senate passed a bill that provides companies strict guidelines on how to determine if a person is an employee or an independent worker.

The bill refers to the California Supreme Court's decision in Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex). The case involved two delivery drivers who sued their company claiming that they had been misclassified as independent contractors instead of employees, and that this misclassification resulted in violations of California's wage and worker laws. The court sided with the drivers, creating the precedent for declaring such workers employees. The bill states that the misclassification of workers as independent contractors harms workers in the loss of workplace protections, causes the state to lose revenue via tax payments, contributes to the erosion of the middle class and aids in increasing income inequality within the state.