Professor Bill Gould weighs in on a recent San Francisco Superior Court ruling which held the Yellow Cab Taxi Cooperative liable for the crash of one of its employees. 

A San Francisco Superior Court jury this week found that a Yellow Cab driver was an “ostensible employee,” making the taxi cooperative liable for a car crash allegedly caused by the driver. The jury awarded $8 million to a passenger injured in the crash.

Some legal experts said the finding in Fua vs. Sanchez may have implications for Uber, Lyft and other companies with workforces composed of independent contractors, while other experts said it’s too different to affect those companies. The case also undercuts taxi companies’ frequent assertions that their insurance coverage for passengers is superior to that of the new ride-hailing companies.

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William Gould, a professor emeritus of law at Stanford Law School, said the case demonstrates “what a thin and sometimes artificial demarcation line there is between these two concepts” of employees and independent contractor. The determining factors are how much control the company has over the worker, and how much entrepreneurial opportunity the worker has, he said.

If individuals are employees, their companies bear liability, he said. “The only way liability could be avoided would be to say that the so-called independent contractor is truly a separate business on his/her own.”