Rideshare Liability

Key Points:

• To successfully plead a claim for negligent hiring, retention, or supervision, a plaintiff must plead specific facts establishing: (1) specific instances of prior misconduct on behalf of an employee; and (2) the employer had knowledge of such specific instances of prior misconduct and still chose to hire, failed to terminate, or declined to supervise the driver, thereby exposing the plaintiff to danger.
• To successfully plead a claim for negligent entrustment, a plaintiff must plead specific facts establishing that a vehicle owner allowed the driver to operate a vehicle with specific knowledge that the driver intended to, or was likely to, use the vehicle in such a way that would harm another.
• Rideshare companies have no generalized duty to investigate their drivers. If a rideshare company fails to investigate its driver, the inference is that it has no knowledge of its driver’s qualifications, or lack thereof, for purposes of negligent hiring and related claims.

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In Henry v. Marcelin, 2024 WL 4293055 (E.D. Pa. Sept. 25, 2024), the United States District Court for the Eastern District of Pennsylvania granted partial judgment on the pleadings in favor of the defendant, Lyft, a rideshare company, in a personal injury action arising out of a motor vehicle collision. In doing so, the court clarified the elements necessary to prove the similar, but distinguishable, claims of negligent hiring, retention, and supervision, and negligent entrustment. The court further held that rideshare companies have no generalized duty to investigate their drivers.

The plaintiff in Henry asserted a negligence claim against the defendant driver, as well as claims of vicarious liability and negligent hiring, training, retention, supervision, and entrustment against Lyft. Lyft filed a motion for partial judgment on the pleadings, arguing the plaintiff’s negligent hiring, training, retention, supervision, and entrustment claim failed to state a claim upon which relief could be granted under F.R.C.P. 12(c). The court granted Lyft’s motion, holding the plaintiff failed to allege specific facts establishing any prior misconduct or dangerous propensity on behalf of the defendant driver, let alone that Lyft had knowledge of such misconduct or propensity to support such a claim under Pennsylvania law. 

In reaching its holding, the court analyzed the plaintiff’s claim of negligent hiring, training, retention, or supervision separately from the claim of negligent entrustment and came to the same conclusion. The court noted that, for the former claim to proceed under Pennsylvania law, a plaintiff must allege specific facts establishing that (1) the employee demonstrated a propensity for misconduct or ill fitness for the position and that, (2) nevertheless, the employer chose to hire, failed to train, declined to terminate, or failed to adequately supervise the employee, thereby putting the plaintiff in danger. The court further noted, although the theories of liability for negligent hiring, retention, and supervision are similar, they all have different elements a plaintiff must plausibly allege to proceed; specifically:

• To prove negligent hiring, the plaintiff must show that Lyft knew or was on notice of its driver’s propensity for misconduct, but nevertheless hired him, thereby exposing the plaintiff to danger. 
• A negligent retention claim is similar, but requires the plaintiff to show that Lyft negligently declined to terminate its driver after learning of a dangerous propensity. 
• To prove negligent supervision, the plaintiff must show that Lyft knew or should have known of a need to supervise its driver, but failed to do so, thereby exposing the plaintiff to danger.

Although all of these theories share the requirement that the plaintiff must allege the driver’s prior bad acts would put a reasonable employer on notice of his propensity to injure others, the plaintiff could not meet her burden merely by alleging the driver was “dangerous” or had a propensity for misconduct. Rather, the plaintiff had to allege specific examples of prior dangerous behavior and of Lyft’s knowledge of such behavior. The plaintiff’s complaint, however, included only broad allegations that Lyft hired and retained the defendant driver when it knew or should have known by and through his “prior unsafe conduct, and/or substandard driving conduct” that he was “incompetent and/or unfit to drive a motor vehicle.” The complaint alleged no specific instances of prior misconduct or of Lyft’s knowledge of such misconduct when it chose to hire, declined to terminate, and/or failed to adequately supervise its driver. Thus, the court dismissed the plaintiff’s negligent hiring and related claims.

Similarly, the court held dismissal was also warranted on the plaintiff’s negligent entrustment claim against Lyft, which required her to plead specific facts establishing that Lyft (1) permitted the defendant driver (2) to operate its automobile (3) with knowledge that the driver intended to or was likely to use the automobile in such a way that would harm another. The court again found the plaintiff’s complaint included only conclusory allegations that Lyft knew of the defendant driver’s “prior unsafe conduct” without alleging any specific facts to support such allegations and, thus, could not establish a plausible claim for relief. 

Finally, and perhaps most significantly, the court held that the plaintiff’s generalized allegations concerning Lyft’s lack of investigation into its driver’s record did not permit a reasonable inference that Lyft knew its driver was unqualified. Rather, such allegations permitted an inference that Lyft did not know anything about its driver’s qualifications because Lyft did not investigate him. 

The court then explicitly rejected the existence of any generalized duty on behalf of a rideshare company to investigate its drivers, reasoning that “under Pennsylvania law, lessors—who are arguably similarly situated to Lyft—do not have a duty to investigate a lessee’s driving records unless they affirmatively assume responsibility from their lessee.” Thus, the court held, because the complaint lacked any factual allegations that Lyft affirmatively assumed responsibility for its driver or had specific knowledge of prior misconduct, Lyft was entitled to dismissal without prejudice of the plaintiff’s negligent hiring and related claims and any claim for negligent entrustment.

The District Court’s ruling in Henry provides employers with greater clarity on the elements of the similar, but distinguishable, claims of negligent hiring, training, retention, and supervision, and of negligent entrustment. The decision provides a strong argument for a motion to dismiss any such claims—including during the pleadings phase—based on a lack of specific facts or evidence establishing prior misconduct and the defendant employer’s knowledge thereof. The decision also provides defendant employers—and, particularly, rideshare companies—with an argument that it has no generalized duty to investigate its drivers.

*Angeline is a member of our Casualty Department. She is a special counsel and works in our Philadelphia, Pennsylvania, office. 

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_{Defense Digest, Vol. 30, No. 4, December 2024, is prepared by Marshall Dennehey to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2024 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}