Principle And Agent Relationship: Wrongful Act By Uber

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Question :

Consider the case of Uber and explain the principle and agent relationship associated with the wrongful act of the company. Consider the role of gig economy in the relationship.

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Answer :

Gig Economy


Uber is the biggest growing company in the transportation. It provides services to peer to peer and ride sharing service and taxi cab services. It has a big chain all around the world and its unique idea and helped drivers to be self-employed. The drivers work as an agent for the companies and company act as the principal for them. 

Agent- Principal

The agency has been referring to a legal relationship between the two parties. It arise when the transactions happened between two parties and one acts as agent of the principle. The agent has been considered as the representative of the principal that can be any entity or any person. He works on the behalf of the person who appointed him and take all the necessary decisions. The drivers are the agent and Uber is the principal. The agency relationship exists as the agent has the legal authority to do any act on behalf of the principal (Jordan, 2017).         

The agent principal is an important part of the corporate governance. The agency theory states the relationship between the agent and the principal. It states that the agent has the duty to work in the interest of principal. The Uber is the principal company and the drivers register in Uber work as the agent for the company (Tucker, 2017).

Uber Liability

The circumstances in which Uber may be held liable for the conduct of its drivers in the situation when the act of the driver to the extent to his duty but the wrongful act has been done due to the instruction of the principal called Uber (Davis, 2015).  The performance contract signed with the drivers but in off chances when the causality is due to the extent of directors of the organization than Uber will be held liable for their acts. It is the vicarious tort in which the liability of company when the employee does any wrongful act and was doing this act in the scope of its employment. In another case, when Uber can been held liable is when the driver declines to perform a particular goal and the Uber guarantees to the client for that goal. Uber in their services guarantees to their customers that they will provide all that has been required by the Uber (Nowag, 2016). It is the liability which arise due to the undue influence and wrongful acts done by the company. 

Steps Uber can take to limits its legal exposure for the conduct of its drivers

It becomes important for the organization like Uber to take proper precautions to protect themselves from the legal action for the conduct of its agents. The Uber has faced in recent years a number of legal actions aginst them due to the act of their agents and they have to pay a huge amount. The Uber to prevent from the vicarious liability it is required to take certain steps. There are legal terms that dictate under the case of Mohamud v Morrison Supermarkets plc [2016] UKSC 11, there are issues that liability to hold, it has been stated that there is the equal relation of the defendant and the one who has done the wrong. Secondly it has been stated that the defendant will only be liable for the actions of the wrongdoer. To avoid such cases it is necessary that company shall take legal initials by the agency that they will be bind by their actions. In this the agent actions has been appeared as true and legitimate. The driver will take the prudence and should been held liable for the action and the conduct as well.  To avoid these types of situation, the principal must convey the relationship between the principal and the agent and the liability on the cause of action (Dubal, 2017). This arise when the cause of action arise between the parties. 


It can say that Uber act as principal and the drivers who has been hired from the application or website of Uber are the agents of Uber. Thus the relationship of principal and agent applies to them. It can say that Uber may be held liable for the act of its agent in certain circumstances. However Uber can take certain steps to prevent it from the certain risks that can happen.  The crux of this report is that principle and agent relation will surely apply on the Uber and its drivers