Uber ordered to pay US$8.5 million in trial over driver sex assault claims

An Uber sign is displayed at the company's headquarters in San Francisco, Monday, Sept. 12, 2022. THE CANADIAN PRESS/AP-Jeff Chiu

A federal jury in Phoenix ordered Uber (UBER.N) on Thursday to pay US$8.5 million after finding it liable in a lawsuit brought by a woman who said she was sexually assaulted by a driver.

The verdict could influence thousands of similar cases against the ride-hailing company, whose shares dipped 1.5 per cent in after-hours trading. Rival Lyft LYFT.O shares were down 1.8 per cent.

The case, brought by plaintiff Jaylynn Dean, was the first trial – known as a bellwether – of more than 3,000 similar lawsuits against Uber that have been consolidated in U.S. federal court. Bellwether trials are used to test legal theories and help gauge the value of claims for possible settlements.

The jury found that the driver was an agent of Uber, holding the company responsible for his actions. They awarded Dean $8.5 million in compensatory damages but declined to award punitive damages. Attorneys for Dean had sought more than $140 million in damages.

In a statement, an Uber spokesperson noted that the jury rejected Dean’s other claims, that the company was negligent or that its safety systems were defective, adding that the company plans to appeal. “This verdict affirms that Uber acted responsibly and has invested meaningfully in rider safety,” the spokesperson said.

Sarah London, an attorney for Dean, said the verdict “validates the thousands of survivors who have come forward at great personal risk to demand accountability against Uber for its focus on profit over passenger safety.”

If the verdict is upheld on appeal, it will be used as precedent in other litigation against Uber, said personal injury attorney John Carpenter of Carpenter & Zuckerman, who is not involved in Uber litigation.

Carpenter said while each sexual assault case is valued on its individual merits, the $8.5 million verdict could be used as a benchmark for other such cases.

Dean, an Oklahoma resident, sued Uber in 2023, one month after her alleged assault in Arizona. She said Uber was aware of a wave of sexual assaults committed by its drivers, but had failed to take basic actions to improve the safety of its riders. Such assertions have long dogged the company, drawing headlines and congressional scrutiny.

Alexandra Walsh, an attorney for Dean, said during the trial’s closing arguments that Uber had marketed itself as a safe option for women travelling at night, particularly if they had been drinking.

“Women know it’s a dangerous world. We know about the risk of sexual assault,” Walsh said. ”They made us believe that this was a place that was safe from that.”

Uber says not responsible for driver actions

Uber, which has faced numerous safety controversies, including allegations of lax driver vetting and a culture critics said prioritized growth over passenger protection, has argued that it should not be held liable for criminal conduct by drivers who use its platform, saying that its background checks and disclosures about assaults are sufficient.

The company maintains that its drivers are independent contractors rather than employees, and that regardless of their classification it cannot be responsible for actions that fall outside the scope of what could reasonably be considered their duties.

“He had no criminal history. None,” Kim Bueno, an attorney for Uber, said of the driver during closing arguments, noting that he had 10,000 trips on the app and a nearly perfect rating from riders. “Was this foreseeable to Uber? And the answer to that has to be no.”

Dean’s lawsuit said she was intoxicated when she hired an Uber driver to take her from her boyfriend’s home to her hotel.

The driver asked her harassing questions on the ride before stopping the car and raping her, Dean alleged in the lawsuit.

U.S. District Judge Charles Breyer, who normally sits on the bench in San Francisco, oversaw Dean’s case in Phoenix. Breyer is managing all of the similar federal cases against Uber, which have been centralized in his court in San Francisco.

The company is also facing more than 500 cases in California state court. In the only one of those cases to go to trial so far, a jury in September sided with Uber. The jury found that while the company had been negligent with its safety measures, that negligence was not a substantial factor in causing the woman’s harm.

Uber rival Lyft (LYFT.O) is facing similar lawsuits in both state and federal court, although there is no co-ordinated federal litigation for those claims.

Morningstar analyst Mark Giarelli said while it was hard to extrapolate the larger financial implications, Uber’s background checks were likely to improve following the verdict.

“This underscores the importance of robust background checks on convenience applications such as Uber, Lyft and DoorDash where there is interaction between customers and the supply side - drivers and delivery agents,” Giarelli said.

Reporting by Diana Novak Jones, Editing by Alexia Garamfalvi, Ethan Smith and Bill Berkrot