ON THE ALLOCATION MECHANISM OF CIVIL LIABILITY IN ONLINE RIDE-HAILING TRAFFIC ACCIDENTS
I. THE RISE OF THE PROBLEMII. THE IDENTIFICATION BASIS OF CIVIL LIABILITY IN THE TRAFFIC ACCIDENT OF ONLINE RIDE-HAILING
A. The Theory of ‘Operation Control, Operation Interests’
B. Preliminary Justification that the Platform Assumes the Civil Liability
III. IDENTIFICATION OF THE EMPLOYMENT RELATIONSHIP BETWEEN THE ONLINE RIDE-HAILING PLATFORM AND THE DRIVER
A. The Determination of the Legal Status of the Platform and the Driver
B. Confirmation of ‘Labor Relationship’ or ‘New Labor Relationship’
IV. THE ALLOCATION OF CIVIL LIABILITY IN ONLINE RIDE-HAILING TRAFFIC ACCIDENTS
A. The Allocation of Liability for Damage to Passengers Caused by the Behavior of Online Ride-hailing Drivers
B. The Tort Liability for Third Person Damage Caused by the Behavior of Online Ride-hailing Drivers
C. The Third Person Directly Infringes on the Passenger: The Supplementary Liability of the Platform Is Based on Shared Liability + Supplementary Protection
D. Allocation of the Liability that the Third Person Directly Infringes on the Driver
V. THE SEAMLESS CONNECTION BETWEEN TORT LIABILITY AND LIABILITY INSURANCE IN ONLINE RIDE-HAILING TRAFFIC ACCIDENTSUnder the mode of Premier and Express, the online ride-hailing platform has become a real transportation service provider by applying the identification standard of ‘operation control, operation interests’. The online ride-hailing platform can obtain income from each online ride-hailing order, review the operation qualification of drivers, train and improve their operating capabilities, and establish the mechanism to quickly discover and deal with abnormal situations. The relationship between the online ride-hailing platform and the driver can be divided into the labor relationship and new labor relationship according to the mode of Premier and Express. If passengers suffer damage due to traffic accidents caused by the online ride-hailing driver, the platform is the primary responsible person in both modes. The platform has the right to indemnification against the driver who has intentional act or gross negligence after assuming the responsibility. If the traffic accident infringes on the rights and interests of passengers due to acts performed by the third person, the platform shall assume the supplementary liability, which is based on shared?liability and the supplementary guarantee procedure in essence. At present, both the platform and the driver should purchase commercial insurance. Usage-based insurance has been technically compatible with the time-sharing and segmented operation mode of online ride-hailing, to realize the seamless connection between the tort liability of the platform and driver, and the liability insurance.I. THE RISE OF THE PROBLEMIn recent years, the sharing economy has been growing and developing around the world based on the ever-changing network science and technology. As one of the typical representatives of the sharing economy, the online ride-hailing platform has effectively improved the supply-demand matching and operational efficiency of taxi services. While the influence of the online ride-hailing platform is expanding, it challenges the economic order and even the legal order of the traditional industry. The Interim Measures for the Administration of Online Ride-hailing Business Operations and Services (hereinafter referred to as the Management Measures for Online Ride-hailing) was implemented on November 1, 2016 and revised in November 2019. The specifications focus on online ride-hailing platform companies, the qualifications of online ride-hailing entities, operating behaviors and related administrative penalties. However, the relevant provisions on civil liability only point out that the online ride-hailing platform company assumes the carrier’s liabilities. In the civil trial, the court should not directly make the platform company assume vicarious or joint and several liability liability based on administrative regulatory documents, because civil relations can only be adjusted by relevant civil laws, and administrative regulatory documents generally cannot be arrogated. The departmental rules of the State Council and the regulatory documents cannot be directly used as the basis for the judgment of tort liability, but they are the important reference factor for judges to exercise their discretion. The Road Traffic Safety Law and other traditional laws and regulations lack specificity and applicability to online ride-hailing as an emerging economic form, and lack standards for determining the relationship between online ride-hailing platforms and drivers, and fail to uniformly stipulate the distribution and undertaking of civil liability in online ride-hailing traffic accidents. Paragraph 2 of article 38 of the E-Commerce Law, which came into effect on January 1, 2019, only stipulates that the online platform shall assume the ‘corresponding liability for compensation’, but there is no clear stipulation as for the specific liability. If applying to article 1198 of the Civil Code on the failure of the administrator of public places or the organizer of mass activities to ensure safety by analogy, the online ride-hailing platform shall assume the supplementary liability if the acts performed by the third person cause damage to passengers; When there is no infringement of the third person, the online ride-hailing platform bears direct tort liability. It is worth pondering whether the civil liability allocation mode in the ride-hailing traffic accidents conforms to the concept of fairness and justice and the reality of sharing economy.The ambiguity or even lack of civil liability regulations has led to different judgments on the liability of online ride-hailing platforms and drivers in different regions and levels of courts in similar situations after the online ride-hailing traffic accident cases enter into judicial procedures. At present, traditional taxis also rely on the information service provided by online ride-hailing platforms as a way of operation. There have been labor relations, affiliation relations or cooperation relations between traditional taxi drivers and their companies or affiliated companies. However, the relationship between online ride-hailing platform companies and taxi companies is the information service relations, and the counterparty of the travel service contract signed with the passenger should be the taxi company rather than the platform. When a traffic accident occurs in the operation that causes damages to consumers, the taxi company shall bear the compensation liability, and the vehicle holder shall be identified as the taxi company rather than the online ride-hailing platform, which is not controversial in both theory and practice. Therefore, the following part of this paper mainly discusses the civil liability allocation mechanism in the traffic accidents of online ride-hailing under the mode of Premier and Express. The research approach is as follows: the author mainly studies the employment relationship between the online ride-hailing platform and the driver from the perspective of the theory of ‘operation control and operation interests’ and the allocation of civil liability in the traffic accident of online ride-hailing platform, and discusses the protection mode to combine tort liability and liability insurance.II. THE IDENTIFICATION BASIS OF CIVIL LIABILITY IN THE TRAFFIC ACCIDENT OF ONLINE RIDE-HAILINGAs a high-speed means of transportation, article 1208 of the Civil Code of China stipulates that: ‘Where a motor vehicle is involved in a traffic accident which causes damage, the liability for compensation shall be assumed in accordance with the relevant provisions of the law on road traffic safety and this Code.’ The law on road traffic safety refers to the Road Traffic Safety Law, and article 76 of the Road Traffic Safety Law is used most commonly for the allocation of liability, the imputation principle of which is a dual system. For the tort liability between a motor vehicle and a non-motor vehicle driver or a pedestrian caused by a traffic accident, the motor vehicle party shall assume no-fault liability within a proportion of 10 percent. If the motor vehicle party is at fault, the corresponding liability for the fault shall be superimposed; the liability for the fault shall apply to the tort liability caused by a traffic accident between motor vehicles.A. The Theory of ‘Operation Control, Operation Interests’When determining the road traffic liability, the standard of the liability subject is based on the uncontrollable risk that the high-speed motor vehicle brings to society. Article 7 of the Road Traffic Act enacted by Germany in 1907 stipulates that the vehicle holder shall be liable for damage to a person or property caused by the use with a motor vehicle, which states that the vehicle holder shall be liable for the peril. In addition, Germany also has compulsory motor vehicle insurance. According to article 3 of the Compulsory Motor Vehicle Insurance Law, the victim has the direct right to claim against the insurer. In the German law, the vehicle holder refers to a person who uses a motor vehicle for his own benefit and has the right of control and operation interests to the motor vehicle. On the other hand, Japan draws on the provisions of German law and puts forward the concept of ‘operation provider’, the meaning of which is consistent with the connotation of German vehicle holders and also takes ‘operation control’ and ‘operation interests’ as the benchmark for judgment. The operation control is not limited to the actual and direct control over the operation, but in the position to give instructions, management and control to the operation of the motor vehicle. Every country basically regards ‘actual control+operation interests’ as the criteria for identifying the vehicle holder. Both traditional legal theory and judicial practice recognize the double-standard theory of ‘operation control, operation interests’. Once a motor vehicle causes damage in a traffic accident, the civil subject who actually controls the operation of the motor vehicle and obtains the operation interests shall bear the liability for compensation. In China’s legislation and trial practice, the above-mentioned criteria for judging the ‘vehicle holder’ are essentially adopted.At present, the main criterion for identifying the ‘vehicle holder’ in China is the theory of operation control and operation interests. So, who is the ‘vehicle holder’ between the online ride-hailing platform and the driver? There is no doubt that the online ride-hailing platform has a certain degree of control over the operation of online ride-hailing. According to the current national regulations on online ride-hailing, the platform not only bears the management obligation for drivers, but also has a reasonable supervision obligation during the operation of online ride-hailing. Therefore, it can be determined that the platform has the dominant power over online ride-hailing. In terms of operation interests, although the driver directly obtains greater interests than the platform from each order, it cannot be ignored that the platform can obtain considerable profits from numerous online ride-hailing orders. In fact, the essence of business behavior of the platform is to provide transportation services, rather than software platform services. The software platform services of online ride-hailing platforms are basically free for online ride-hailing drivers and consumers. The main source of business income for platform companies is the transportation services provided by drivers. The reason why the platform assumes the liability is that it has the characteristics of operation control and intersts. Therefore, the platform is the ‘vehicle holder’. For example, in the civil judgment of the Nanjing Intermediate People’s Court, the court held that Hu could carry passengers for transportation, and the transportation behavior of the online ride-hailing driver came from the order dispatched by the online ride-hailing platform, which is a ‘dangerous operator’. In the course of transportation, the online ride-hailing platform company clarifies the destination for the online ride-hailing driver when dispatching, charges directly from the rider, pays a part of the fees to the ride-hailing driver, and dispatches the order based on the evaluation of consumers. As a result, the court believed that the online ride-hailing platform was in a position of ‘operation control’. At the same time, the court held that the online ride-hailing platform enjoys ‘operation interests’ by taking 20 percent cut of each trip cost. To sum up, the court held that the online ride-hailing platform company should be identified as the ‘party to the motor vehicle’ stipulated in article 76 of the Road Traffic Safety Law, that is, the ‘vehicle holder’. The online ride-hailing platform and the driver Hu should assume joint and several liability in the traffic accident case.B. Preliminary Justification that the Platform Assumes the Civil LiabilityTo determine the distribution of liability for damages in online ride-hailing traffic accidents, there are mainly the following bases: the first is the theory of compensation, namely the principle of ‘the one who enjoys the interests shall bear more risks’. The second is the theory of risk control, that is, the principle of ‘the one who can control and reduce the risk should assume more liabilities’. The third is the theory of risk sharing, that is, the online ride-hailing traffic accidents are risks arising with the development of modern Internet technology. Therefore, all members of society who enjoy modern civilization should share the damage. As a responsible entity, the platform’s ability to pay compensation is much stronger than that of the driver. In many cases, the platform can resolve disputes more effectively, and can be motivated to better manage the driver and reduce the occurrence of accidents. There are the legitimate reasons for the online ride-hailing platform to assume the liability for compensation as follows:First, the online ride-hailing platform has the ability to avoid damage to a certain extent, and can be presumed to be at fault by failing to perform the corresponding review obligations and disposal obligations in time. Online ride-hailing platform companies are the initiators and managers of ‘signing contracts online and performing contracts offline’, and the Internet + model of online ride-hailing enables the platform to have certain risk control ability, which can effectively review the vehicles’ drivability and the drivers’ qualifications in advance; they can review the consistency of drivers online and offline during the incident, guarantee the safety of additional services provided, and establish a mechanism for rapid discovery and disposal of abnormal situations; the data backup management system can be optimized and improved afterwards, allowing the platform to assume the risk liability for the damage to consumers and also promote the platform to increase investment in risk management and control behavior, and effectively reduce the occurrence of online ride-hailing traffic accidents. For example, one of the important reasons for the frequent occurrence of online ride-hailing traffic accidents is that the drivers are in a state of fatigue. Compared with other subjects, the online ride-hailing platform can efficiently and conveniently avoid risks with relatively small preventive costs. The platform company only needs to limit the daily working hours of each driver using the online ride-hailing software. Once the limited time is exceeded, the service of the online ride-hailing software will be disconnected, thus reducing the probability of accidents caused by drivers’ fatigue driving.Second, there is a legally relative causal relationship between the platform’s act of providing online ride-hailing services and the damage result. The criterion of relative causality is whether the behavior enhances the possibility of damage to the degree of relative causality. Relativity has different degrees, and the amount of liability should be adapted to the degree. The platform and the driver are the common cause of damage, and should also jointly prevent the damage. It is because the online ride-hailing platform has opened various operation modes that the passengers order and accept transportation services based on their trust in the online ride-hailing platform. Although there is no direct causal relationship between the services provided by the ride-hailing platform and the damage to the passengers, there is a relative causal relationship if personal injury or property damage occurs in the course of online ride-hailing transportation. For example, the behavior of online ride-hailing platform companies in violation of audit obligation or safety protection obligation is related to the infringement of online ride-hailing drivers, so they both constitute an inseparable whole and are the common cause of damage.Third, the platform company shall assume corresponding liability while obtaining interests. The online ride-hailing platform extracts certain fees from the driver’s order, and the platform’s operation income comes from the driver’s. Those who have benefited from engaging in for-profit affairs shall be liable for damages caused by the dangerous business behaviors.Fourth, the damage dispersion and insurance system. Those engaged in risky affairs generally have a strong ability to bear the damage compensation. The ‘deep pocket’ argument holds that business entities can transfer the risk to consumers through the price mechanism. The platform company has a relatively strong ability to bear damage compensation, and can take more rational considerations for purchasing commercial insurance. If the platform assumes the corresponding liability, then the risk can be concentrated on the platform. The platform company can transfer the risk to consumers and online ride-hailing drivers through the price mechanism (service charge pricing and the proportion of fees) to realize risk diversification.III. IDENTIFICATION OF EMPLOYMENT RELATIONSHIP BETWEEN THE ONLINE RIDE-HAILING PLATFORM AND THE DRIVERThe online ride-hailing can be divided into two modes according to the specific operation mode: Premier and Express. The carpool is different from online ride-hailing, which is the reciprocal aid and benefit among people for the purpose of sharing the fuel and road expenses (of course, drivers may also carry out ‘carpool’ business for profit). Strictly speaking, the carpool does not belong to the scope of online ride-hailing as defined in article 2 of the Interim Measures for the Administration of Online Ride-hailing Business Operations and Services, so it will not be discussed in this paper. We will discuss the nature of the employment relationship between the online ride-hailing platform and the driver under the mode of Premier and Express below. In the civil cases of ride-hailing traffic accidents, although a party generally lists the platform company as the defendant, the court regards it as the ‘middleman’ role in the intermediary contract in many cases. In addition to the burden of proof factor, the platform has not been determined as the employee to assume the liability, which indirectly denies the carrier’s liability of the online ride-hailing platform in the transportation service contract substantially. In judicial practice, the court generally determines the liability based on the accident certificate issued by the traffic police department, while the accident certificate only specifies the person directly involved in the accident. In traditional traffic accidents, the liability of the employer, the affiliated party, and others are determined only after the traffic accident case is filed to the court. The court will ascertain the relationship between the perpetrator and his employer or affiliated party, etc., and then make a judgment based on the ascertained facts. Therefore, it is difficult to directly attribute the fault of the accident to the online ride-hailing platform based on the accident certificate of the traffic police department. Only after the court ascertains the basic facts about the employment relationship between the online ride-hailing platform and the driver, can the online ride-hailing platform assume the liability.A. The Determination of the Legal Status of the Platform and the DriverWhether the online ride-hailing driver is an employee or an operator of the platform is still controversial. In the case of Berwick v. Uber Technologies Inc., the California Labor Commissioner’s Office admitted a former Uber driver as an employee. The online ride-hailing company claims to be a technology platform that connects the driver and the passenger, and the driver should legally be the operator of the platform. In the legal document and litigation procedure, Uber considers being a technology company that has created a market connecting the passenger and the driver. Uber claims that it does not take any responsibility for the actions or faults of drivers. The driver, as the platform’s operator, directly establishes a contractual relationship with the passenger. But this is not the case. The person who works on the platform actually seems to live in a gray area between being the employee and the operator. The passenger may have various complaints against the driver, including poor route choice, unsatisfactory vehicle conditions etc., but Uber says that the passenger shall file the legal claim against the driver rather than the company. At the same time, Uber assumes expectations of the passenger regarding the safety and reliability of the driver, advertising that it provides ‘a journey you can trust’, including the driver background check, driver ratings, insurance and round-the-clock support. Whether the online ride-hailing driver can be classified as the operator of the platform is crucial. If the driver is considered to be an employee of the platform, the platform as an employer shall assume the vicarious liability; if the driver is an operator of the platform, he shall directly assume the liability for personal injury and property loss of the passenger, and the platform only assume the liability of the intermediary. In addition to considering the main characteristics of profitability, the definition of the operator also needs to take the independence of behavior subjects into account. The operator is an independent business entity engaged in the business operation with its own name, trade name, or an individual who exists as a natural person, which are essentially different from laborers in the legal concept. In the mode of Premier and Express, the online ride-hailing driver is not engaged in the transportation service as a contractor, but in the name of the platform. The platform company not only provides information intermediary services, but also initiates online ride-hailing transactions and obtain more benefits. The platform company can control the operation and service behavior of the driver to a certain extent. The passenger makes contract with the platform company rather than the driver. Therefore, the online ride-hailing driver is not the in-platform operator. Compared with the driver, the platform should be the operator of transportation services.B. Confirmation of ‘Labor Relationship’ or ‘New Labor Relationship’The current judgment standard of labor relationship cannot fully adapt to the actual situation of online ride-hailing employment, so we must introduce new judgment factors on the basis of existing law. If online ride-hailing drivers are fully identified as employees and enjoy all the benefits of laborers, the online ride-hailing platforms will bear additional burdens such as taxes and insurance, and the huge additional cost will be a devastating disaster for the platform companies. According to whether the drivers work part-time or full-time, they can be divided into part-time and full-time online ride-hailing drivers. Part-time online ride-hailing drivers refer to those who establish informal employment relations with the online ride-hailing platforms after having established formal labor relations with employers. Full-time online ride-hailing drivers refer to those who have only established employment relations with one or more online ride-hailing platforms. Full-time employment is divided into several different situations: First, some online ride-hailing platforms require drivers to exclusively access their own platforms and clearly specify the working hour, remuneration, assessment method, and pay social insurance for the drivers. This type of employment is undoubtedly a labor relationship. Second, although some online ride-hailing platforms require drivers to only access their own platforms, they do not sign the labor contract with drivers and do not stipulate specific working hours. Drivers can decide the working hours on their own will and the platforms will charge a certain percentage of fees based on the orders provided for the drivers. Third, the online ride-hailing drivers can decide to access several platforms by themselves, and often sign contracts with leasing companies and labor dispatch companies rather than directly with each platform. This employment model is also complicated, and the relationship between online ride-hailing platforms and drivers cannot be generalized. For example, Didi uses a ‘four-party agreement’ adding the car rental company and labor service company to separate the employment relationship between the platform and the driver. The so-called ‘four-party agreement’ means that the four parties, which includes the online platform company, the car rental company, the labor dispatch company, and the driver, sign an agreement to regulate each other. The four-party agreement determines the rights and obligations of the related parties, but in fact the platform controls and manages the entire process of employment. This situation confirms that the platform and the driver are in the category of a new type of labor relationship.The labor relationships currently protected by the Labor Contract Law of China mainly include the following types: typical labor relationship with strong subordinate nature, labor dispatch relationship, and part-time employment relationship. In the era of Internet +, the labor relationships reflect the characteristics of diversification and flexibility, and the subordinate nature tends to weaken. It is necessary to add a new type of labor relationship. In the game between the platform operator and the driver, the platform is more powerful, while the driver is often in a relatively weak position. Appropriate protection methods should be adopted for the intermediate type of new labor relationship. The relationship between drivers and online ride-hailing platforms should be considered as a new type of labor relationship, which is different from the traditional labor relationship. First, the labor relationship between the online ride-hailing platform and the driver is different from the labor relationship with strong personal subordination in the traditional form, which is a new type of dependent labor relationship. The operation of drivers to carry passengers must be dependent on the platform. However, this kind of labor mode in which drivers take orders independently with flexible working hours and the platform collects a certain commission weakens the driver’s personal subordination to the platform; Second, drivers need to follow the rules and regulations of the online ride-hailing platforms. In other modes formed by the online ride-hailing platform through unilateral or multi-party agreements, the online ride-hailing platform and the driver also constitute a ‘new type of labor relationship’ as mentioned above (see Table 1).
Table 1: Identification of Different Business Models and Employment Relations of Online Ride-hailing
According to the platform’s management of drivers, income sharing, full-time or part-time employment and other factors, a labor relationship that combines ‘typical labor relationship’ and ‘new labor relationship’ is constructed. A feasible way is to perform technical processing on the social insurance accounts of part-time drivers, so that each employer can contribute to the social insurance accounts of part-time employees separately. Meanwhile, the platform only needs to bear the payment amount that matches the part-time working hours, reducing the platform’s labor cost. Recently, the British Supreme Court has ruled that the Uber drivers are employees. The judge accused Uber of requiring its drivers to conclude controversial contracts, saying that these contracts ‘can be seen as obstacles that prevent drivers from claiming the rights of employees under the applicable laws.’ The ruling stated that Uber must treat the drivers as employees from the time they log into the Uber app to the time they log out. The employees have more rights than the self-employed, but fewer rights than the formal employees of enterprises. For example, the latter have the right to get maternity leave wages and oppose unfair dismissal. Of course, more legislative innovations are needed to effectively protect the legitimate rights and interests of online ride-hailing drivers. For self-employed workers such as online ride-hailing drivers emerging in the sharing economy, the legal subject status of ‘quasi workers’ shall be clearly defined in the labor law with a lower social security standard than ordinary workers.
IV. THE ALLOCATION OF CIVIL LIABILITY IN ONLINE RIDE-HAILING TRAFFIC ACCIDENTS
When an online ride-hailing traffic accident occurs, the parties involved in the traffic accident can be divided into the infringing party and the infringed party. The infringing party includes the platform, the driver, the third person, etc., while the infringed party includes the third person, and the passenger, etc. The passenger and the third person are the infringed party in most cases, but may also become the infringing party in a few cases. As shown in Figure 1, the following mainly analyzes the allocation of civil liability in online ride-hailing traffic accidents from the perspective of the infringing party.Figure 1: The Allocation of Civil Liability in Online Ride-hailing Traffic AccidentsA. The Allocation of Liability for Damage to Passengers Caused by the Behavior of Online Ride-hailing Drivers1. The Allocation of Civil Liability under the Mode of Premier and Express. — In order to study the civil liability of online ride-hailing platform in traffic accidents, the second-instance civil judgments of online ride-hailing cases issued by the local intermediate courts and above since the Administrative Measures for Online Ride-hailing formally came into effect on November 1, 2016 are selected and summarized below. From the judgments, there are at least the following standpoints regarding the assumption of liability for damages in online ride-hailing traffic accidents: First, the online ride-hailing driver shall assume the corresponding compensation liability. For example, in the case of Dai Baoyuan and Shan Tiantian for dispute over property damage compensation, the court held that the online ride-hailing driver failed to fulfill the obligation to remind the passenger and should assume the main compensation liability; in the case of Lin Jiankui and Linda for dispute over right to life, right to health, and right to corporeal integrity, the court held that the online ride-hailing driver establishes a transport contract with the ordering party after receiving the order, and had the contractual obligation to deliver the passenger to the destination. However, when Liu Junli found that Liu Lianfang was seriously ill and in urgent need of medical treatment, she refused to take the passenger for fear that the other party would die in the car. The subsequent quarrel delayed the treatment of Liu Lianfang, so the driver should be deemed to assume 10 percent compensation liability for the death of the deceased; in the case of China Insurance and Lu Zailiang, Wang Ting, and Zhang Shijie et al. for dispute over the transport contract, the court held that Lu Zailiang, Wang Ting and Zhang Shijie formed a transport contract relationship. Zhang Shijie had a traffic accident in the course of transportation, causing personal injury to the passengers Lu Zailiang and Wang Ting, so Zhang Shijie shall be liable for compensation in accordance with the law. The judgments of the above cases show that online ride-hailing drivers have corresponding obligations in the entire course, and it also involves the issue of whether the online ride-hailing driver can refuse to take the passenger. Second, the online ride-hailing platform assumes the corresponding liability for compensation. For example, in the motor vehicle traffic accident liability dispute case of Luoyang Branch of Fujian Youjia Driver Service Co., Ltd. and Li Jianchi, the court held that both the company and Jin Leilei recognized that Jin Leilei was an employee of the appellant and had a labor contract to prove that, so the Luoyang Branch of Fujian Youjia Driver Service Co., Ltd. shall assume vicarious liability for compensation. In the case of Beijing Dongfang Cheyun Information Technology Co., Ltd. and Zhixing Weidao (Beijing) Information Technology Co., Ltd. for dispute over motor vehicle traffic accident liability, the court held that Dongfang Cheyun Co., Ltd., Zhixing Weidao Co., Ltd., and Shanghai Ctrip Co., Ltd. were the actual operating entities of ‘Ctrip Yidao’ which provided the pick-up service. The internal agreement on liability is not sufficient to counter the claims of the third person, so they shall assume the joint and several liability for compensation. According to the commercial law principle that the company internal agreement cannot confront the bona fide third party, the online ride-hailing platform shall assume the joint and several liability for compensation. In the second-instance civil judgment of Beijing Yidao Travel Agency Co., Ltd. and Beijing Shunyida Enterprise Management Co., Ltd. for dispute over right to life, right to health, and right to corporeal integrity, the court held that Fan Lijuan used the ‘Yidao Yongche’ APP to book a motor vehicle, and Yidao Travel Agency provides the travel service for Fan Lijuan, so Yidao Travel Agency and Fan Lijuan formed a legal relationship in the transport contract. Yidao Travel Agency is the carrier, and shall assume the liability for breach of contract for the damage suffered by Fan Lijuan.After an online ride-hailing traffic accident occurs, if the victim (passenger) is the person who hails the vehicle, he can either require the carrier to perform contractual responsibility according to the ride-hailing contract, or demand the infringer to compensate for the loss according to the relevant provisions on tort liability. At this time, the liability for breach of contract and the tort liability concur. The consumer requesting the online ride-hailing platform to assume the liability for breach of contract cannot claim compensation for pains and suffering, while the consumer requesting the online ride-hailing platform to assume tort liability can claim compensation. According to the Administrative Measures for Online Ride-hailing, the online ride-hailing platform company rather than the driver shall assume the liability of the carrier, and the passenger can claim rights to the platform company based on the contractual relationship. The online ride-hailing platform company’s liability for breach of contract needs to have a contractual agreement with the passenger. Since the standard terms of the contract are provided by the platform, the platform company often stipulates an exemption clause in the standard clause or does not set an agreement on liability for breach of contract, leading to the lack of contract basis of compensation for the passenger. In practice, there are some cases in which the passenger sued the ride-hailing platform to the court on the grounds that it had a transport contract relationship with the ride-hailing platform company, claiming the ride-hailing platform to assume the carrier’s liability. Most courts determine that the online ride-hailing platform is the carrier (that is, the vehicle holder), but some courts have also determined that the owner of the online ride-hailing is the carrier. For example, in the case of the transport contract dispute between the appellant Zhengzhou Branch of China Insurance and the appellee Lu Zailiang, Wang Ting, Zhang Shijie, Didi Chuxing Technology Co., Ltd., Beijing Xiaoju Technology Co., Ltd., and Henan Rongcheng Automobile Leasing Co., Ltd, both Xingyang People’s Court of Henan Province as the first instance court, and Zhengzhou Intermediate People’s Court of Henan Province as the second instance court, held that Zhang Shijie, the owner and driver of the online ride-hailing motor vehicle, as the carrier.2. The Allocation of Civil Liability under the Mode of Premier and Express. — (i) The mode of Premier. The premier car is independently operated by the online ride-hailing platform, which is the owner and carrier of the vehicle. If the driver causes personal injury or property damage to the passenger or the third person in the course of operation, the online ride-hailing platform as the employer (vehicle owner) shall assume no-fault liability. In the case of a traffic accident involving the online ride-hailing service, the platform as an employer assumes vicarious liability for passengers and the injured third person in the Premier mode. For example, in the case of motor vehicle traffic accident liability dispute between Shouyue Technology Beijing Co., Ltd. and Liu Pei, the court held that although Yin Kaichun was employed by Xinda, he received the order according to the dispatch of Shouyue. Shouyue charged management fees from the remuneration of Yin Kaichun in accordance with a certain proportion, and the rent paid by Xinda to Shouyue is also directly derived from Yin Kaichun’s remuneration. Therefore, Shouyue is the actual employer. When the traffic accident occurred, Yin Kaichun was engaged in the work assigned by Shouyue which was a duty behavior, and Shoukai should undertake the consequences. According to the traffic accident certificate, since the driver is the direct infringer and has obvious subjective fault, whose behavior has a direct causal relationship to the occurrence of the damage, he assumes full or primary liability for the occurrence of a traffic accident. The online ride-hailing platform shall claim indemnification against the driver after assuming the liability for compensation.(ii) The mode of Express. Most express drivers are private car owners (that is, the ‘private car owner + private car’ model). Article 1192 of the Civil Code stipulates the assumption of tort liability in the labor relationship. If the party providing labor services cause damage to another person, the party receiving labor services shall assume tort liability. The service-receiving party may claim indemnification against the service-providing party who acts intentionally or with gross negligence. In the case of the employment relationship between the online ride-hailing platform and the driver, many courts affirm that the online ride-hailing platform and the driver constitute a labor relationship, so the provisions of the clause can be invoked to determine the liability. For example, in the retrial civil judgment of PICC P&C Yongkang Branch and Didi Chuxing Technology Co., Ltd. for dispute over motor vehicle traffic accident liability, the court held that Cheng Kesheng became a registered driver of Didi platform through the online registration and service agreement, and accept the dispatch by the platform to provide the transportation service for the passenger firstly; after receiving the fare paid by the passenger, the platform pays part of the fees to the driver after deducting relevant expenses. Secondly, the driving behavior of Cheng Kesheng is subject to the supervision and restriction of Didi. It is reflected in the fact that the online ride-hailing platform has the unilateral decision-making power on driver registration and cancellation. The driver provides transportation services in accordance with the platform instruction and has no right to set the price, and the platform monitors the applause rate of the driver. Under the circumstance that Cheng Kesheng provided services and accepted the supervision of Didi, the two sides formed an employment relationship in fact, which is a new type of labor relationship discussed in this article. That is, in the Express mode, the platform is the primary responsible person and has the right to claim indemnification against the driver who has intentional act or gross negligence after bearing the liability for compensation.The rules for the implementation of online ride-hailing formulated by some cities stipulate that the platform shall assume the liability for advance compensation. For example, article 14 of the Several Provisions of the Shanghai Municipality on the Administration of Online Ride-hailing Business Services of 2016 clearly stipulates that ‘Where a safety accident occurs when online ride-hailing services are provided, the company running an online ride-hailing platform shall assume the liability of advance compensation for the loss of passengers.’ It has innovative significance. The platform company’s liability for advance payment is no-fault liability to some extent, and is also the unreal joint and several liability. Of course, after the platform assumes the liability for advance compensation, it can claim indemnification against the responsible person at fault.B. The Tort Liability for Third Person Damage Caused by the Behavior of Online Ride-hailing DriversIf the victim is not the passenger (consumer) of the online ride-hailing vehicle but other infringed persons, the infringed person may be the driver, the passenger of the other party’s vehicle or the electromobile owner or pedestrians who had a traffic accident with the online ride-hailing vehicle. Regardless of the specific identity of the infringed person, he is not the counterparty for the online ride-hailing platform, and cannot claim the loss based on the contractual relationship. In judicial practice, the infringed party can claim the rights in accordance with the relevant provisions of the Civil Code and the Road Traffic Safety Law. In the mode of Premier and Express, the platform shall assume the vicarious liability for the behavior of the online ride-hailing driver. If the online ride-hailing driver (platform) is not at fault as the infringing party (the vehicle holder), the platform should bear 10 percent of the total loss; if the online ride-hailing driver (platform) is at fault, the corresponding proportion of liability for the fault shall be added.In addition, we should consider the basic legal principle of joint and several liability from two aspects of accountability and causative potency. If the person who fulfills the duty of maintaining safety (the online ride-hailing platform company) changes from general negligence to intentional subjective state or exceeds ‘no positive causal force’ for the occurred damage, which constitutes the direct combination objectively, the platform shall assume the joint and several liability. After distinguishing the intentional or negligent act of online ride-hailing platforms, they shall bear the joint and several liability and supplementary liability respectively. The traffic accident is generally the negligent act, unless the platform knows or should know that the service provided by the driver do not meet the requirements to protect personal and property safety, or other infringes upon the legitimate rights and interests of consumers without taking necessary measures, and the subjective status is intentional. The joint act of tort has been constituted, and the platform shall assume the joint and several liability together with the driver.C. The Third Person Directly Infringes on the Passenger: The Supplementary Liability of the Platform Is Based on Shared Liability + Supplementary ProtectionAdministrative regulations have an important impact on tort liability. For example, the online ride-hailing platform company which violates articles 17 and 18 of the Interim Measures for the Administration of Online Ride-hailing Business Operations and Services, and fails to meet administrative regulations and fulfill corresponding supervisory duties and safety protection obligations, should bear the corresponding administrative liability. At the same time, the online ride-hailing platform can be presumed to have subjective fault because of not reaching the standards to ensure the safety of passengers set by the clause, and the court can make judgments in civil tort cases based on this. Therefore, the scope of the platform to perform the safety protection obligation is limited within the administrative regulations. For example, the online ride-hailing platform has not fulfilled the obligation to review the qualifications of the driver in advance, or has not performed the duty to ensure safety for the passengers (consumers). The platform that causes damage to passengers (consumers) and violates the requirements of relevant administrative laws and regulations should assume the administrative liability. The online ride-hailing platform can be presumed to be at fault and assume corresponding tort liability according to the fault degree.In the case of direct infringement by the third person, the platform shall be liable for supplementary compensation in breach of the duty of maintaining safety. The supplementary liability of the platform should be determined as follows: The first is the shared liability. If the direct infringer and the person who fulfills the duty of maintaining safety have no intention to contact and cause damages due to the joint infringement, they shall bear the liability in proportion to their respective share of fault, that is, ‘to bear the corresponding liability within the scope of the fault’. The fault shall be determined on the basis that the damage can be avoided or reduced if the person with the duty of maintaining safety actively acts. In addition, the duty of maintaining safety of the online ride-hailing platform should be limited to a reasonable range and be compatible with its management and control capability. The second is the real supplementary liability. Only when the direct infringer cannot bear all the liability or the directly responsible person cannot be determined, that the person with the duty of maintaining safety shall be placed in advance and bear the liability for compensation. In order to reflect the complementary of the liability undertaken by the online ride-hailing platform, it should be clarified that the proportion of the online ride-hailing platform’s supplementary responsibility within the scope of the direct infringer’s liability should not exceed 50 percent. The third is the right to indemnification. After paying the compensation, the person with the duty of maintaining safety may claim indemnification against the direct infringer, and the limit of the indemnification should exclude the amount that he needs to bear at fault. It is still the shared liability based on fault, and the final distribution of liability is that the direct infringer and the security obligor (platform) bear the tort liability within the scope of their respective faults.D. Allocation of the Liability that the Third Person Directly Infringes on the DriverIf the third person’s act causes personal injury or property loss of the driver, the third person shall bear the tort liability. If the third person is the motor vehicle party, the compulsory motor vehicle insurance of the third person shall make the compensation first, and the insufficient part shall be paid by the third person’s compulsory motor vehicle insurance. If there is still not enough, the motor vehicle party will pay the compensation. If the third person is a pedestrian or a non-motor vehicle driver, who has no compulsory motor vehicle insurance, the third person shall directly compensate the driver for the loss. Of course, as an employee of the online ride-hailing platform company, the driver can enjoy the work-related injury insurance and get compensation from the insurance fund. If the online ride-hailing platform company does not purchase work-related injury insurance, the platform company should bear the compensation liability equal to the work-related injury insurance benefit. In judicial practice, the medical expenses of the above-mentioned driver can only be compensated once. A lump-sum disability subsidy, one-off work-related injury medical subsidy paid by the work-related injury insurance fund after the injured employee’s termination of employment contract, and the lump-sum disability employment subsidy stipulated by the Regulation on Work-related Injury Insurance that make double compensation, are different from the disability compensation stipulated in article 16 of the Tort Liability Law.If the damage is caused by both the fault of the third person, the driver, and the passenger (consumer), the liability is still divided according to the degree of fault, and the internal liability sharing shall be subject to the applicable law.V. THE SEAMLESS CONNECTION BETWEEN TORT LIABILITY AND LIABILITY INSURANCE IN ONLINE RIDE-HAILING TRAFFIC ACCIDENTSIn many cases, the platform only assumes the shared liability and often fails to pay the full compensation for victims in traffic accidents. Therefore, the mode of combining tort liability and liability insurance is needed to fully protect the rights of victims in motor vehicle traffic accidents. The integration of tort liability law and the compulsory motor vehicle insurance system strengthen the relief of victims and their families in online ride-hailing traffic accidents, having a major social security function. In Taiwan region of China, the liability for automobile traffic accidents adopts the presumed liability for the fault and cooperates with compulsory motor vehicle insurance. ‘No matter whether the infringer is at fault or not, the claimant (the victim) may request the insurance payment from the insurer or the special compensation fund for automobile traffic accidents’. According to article 1213 of the Civil Code of China, ‘Where damage is caused to another person as a result of a traffic accident and the liability is attributed to the motor vehicle driver, compensation shall be made first by the insurer that underwrites the compulsory motor vehicle insurance within the limit of the insured liability. The deficiencies shall be paid by the insurer that underwrites the commercial motor vehicle insurance in accordance with the stipulations of the insurance contract. Any remaining balance or the part not covered by any commercial motor vehicle insurance shall be paid by the tortfeasor.’ Based on the protection purpose of the compulsory motor vehicle insurance system in China, after the traffic accident, no matter whether the motor vehicle party has fault, as long as there is no statutory reason for compulsory motor vehicle insurance exemption, the insurance company shall assume the liability for compensation at first. The motor vehicle commercial insurance company shall compensate for the deficiencies. If it is still insufficient, the online ride-hailing platform, the driver, and the third person shall bear the corresponding liability.At present, the actual problem is that the insurance coverage cannot fully cover the damage that occurs. Some drivers only purchase compulsory motor vehicle insurance but does not purchase commercial insurance, or even if they purchase the commercial insurance, the insurance coverage does not include accidents that occur when the use nature of the vehicle has changed to an operational vehicle or there is no license issued by the motor vehicle transport administrative department or other necessary certificates. For example, in the second-instance civil judgment on the liability dispute between Luo Zhaochun and Guangzhou Tonglida Automobile Leasing Co., Ltd. for a motor vehicle traffic accident, the court held that the insurance company had submitted the statement of the insured, insurance clauses and other evidence to prove that it had already performed the obligation of calling attention or giving explanations to the insured Tonglida that the leased motor vehicle does not have the license issued by the transport administrative department or other necessary certificates. When the accident occurred, the nature of the vehicle involved in the case had been changed to leased vehicle, which is a commercial motor vehicle. The driver Luo Zhaochun had not obtained the taxi driver’s license of Guangzhou in accordance with the regulations. The insurance company claiming to exempt the liability from the third-party liability insurance complied with the agreement. In the second-instance civil judgment on the liability dispute between Huang Haixia and Guangzhou Zelin Automobile Leasing Co., Ltd. for motor vehicle traffic accidents, the court held that the Insurance Form submitted by Dubang Insurance Company could prove that the insured Qingsong Company had performed the obligation of giving explanations of the exemption clause to Dubang Insurance Company. The form was confirmed by seal and the clause has legal effect. Wang Lei had a traffic accident while driving the taxi without obtaining the online ride-hailing driver’s license, which complies with the above exemption clause. The insurance company’s appeal for the exemption from the third-party liability insurance was supported based on the clause. Similarly, in the second-instance civil judgment of Li Cunjun and Liu Qiang et al. for dispute over motor vehicle traffic accident liability, articles 3 and 4 in the risk warning column of the policy stated that ‘Please read the corresponding clauses of the insurance coverage, especially the liability exemption, deductible ratio, deductible amount’ ‘If the insured motor vehicle is modified, reinforced or changed in nature which causes a significant increase in the degree of danger, as well as resold, transferred, or gave away to others, the insurer shall be notified.’ The corresponding exemption clauses are all reflected in bold and black font, and the vehicle involved in the case and the appellant did not have the necessary certificate to engage in online ride-hailing which violated the employment prohibitive regulations. The appellee PICC took this as the reason for the insurance contract exemption clause and called the attention, which complied with the law. To sum up, the accident in this case complies with the reasons for exemption stipulated in the exemption clause, and the PICC has the right to refuse compensation within the scope of commercial insurance.Similarly, the reason why the insurance company generally refuses to pay for the insurance purchased by private car drivers is that the insurance coverage does not cover accidents that occur when the vehicle is in operation, and the driver uses the vehicle for commercial operation, which significantly increases the danger degree of the insured vehicle. On the issue of compensation for commercial liability insurance, the court’s decision on whether the insurance company compensates or not mainly involves the burden of proof. All judgments require the insurance companies to provide evidence for the defense they claim, and they bear the responsibility to prove the change in nature of the subject matter, which is undoubtedly beneficial to the online ride-hailing platform and the driver. However, the ruling does not favor the online ride-hailing platforms and drivers. According to the statistics, the winning rate was only 55 percent. The reason for the court’s ruling not to indemnify third-party liability insurance is that it is the insurance company’s exemption situation of ‘a significant increase in the degree of danger’ in which the applicant had a traffic accident after changing the usage nature of the family vehicle that is engaged in the online ride-hailing operation, and does not notify the insurance company. The main gist of the court’s judgment in the case of compensating third-party liability insurance is that the evidence submitted by the insurance company is not sufficient to prove that it has performed the obligation of calling attention or giving explanations to the policyholder on the exemption clause. The insurance company cannot prove that the act of the insured makes the peril degree of the subject matter increase. Where there is no evidence to prove that the insured has the legal duty to notify the insurer when the degree of peril of the subject matter insured greatly increases significantly during the validity of the contract, so it does not comply with article 52 of the Insurance Law. It is believed that the insurance company cannot provide evidence and shall bear the insurance compensation liability within the scope of the third-party liability insurance.Article 52 of the Insurance Law stipulates the statutory exemption from liability. The insurance company often uses the exemption clause to refuse compensation, which also leads to the risk of not getting full compensation for the victims of online ride-hailing traffic accidents. If the civil liability that the subject should bear can be clarified, it can prompt the responsible subject to actively insure to transfer the risk. The platform company should purchase the carrier’s liability insurance. The platform or the driver must purchase the compulsory motor vehicle insurance and third-party liability insurance for operating vehicles. The insurance coverage should cover the entire service, that is, from the time when the driver opens the software to the time when the software is closed after the completion of the transportation. Because once the software opens, the driver has the possibility to be dispatched by the platform. Time and section-based insurance can be introduced. The commercial insurance will be used when private cars start to operate online ride-hailing services, and general type of insurance will be used when the vehicles are used for domestic use. UBI Auto Insurance can technically fit the time and section-based operation model of online ride-hailing. If the civil liability of the online ride-hailing platform can finally be clarified, it will prompt the online ride-hailing platform or the driver to actively purchase the commercial insurance for the vehicle in operation. In the US, ‘Uber has implemented the uninsured driver policy with USD 1 million to provide passengers with additional protection in the event of an accident’, the liability insurance of which is more than that of traditional taxis. When the insurance company does not bear the insurance liability within the scope of the third-party liability insurance, the carrier’s liability insurance and accident liability insurance purchased by the platform will provide insurance protection for the injured passengers (consumers) and the infringed party. As for the responsibilities of the platform, the driver, and the insurance company, the responsibilities should be divided first. The platform as the insured is only responsible for the platform’s responsibility, and the driver as the insured is only responsible for the driver’s responsibility. With regards to traffic accidents within the insurance coverage, the insurance company shall first compensate within the insured amount, and then the platform, the driver, and the third person shall pay the compensation within the scope of respective liability.Only by clarifying the legal status of the platform company and the legal relationship with other subjects under different models can the courts correctly apply the law, thereby protecting the legitimate interests of the emerging ‘online employers’ (ride-hailing drivers), and guarantee the rights of online ride-hailing consumers (passengers). At present, many passengers use aggregated taxi-hailing platforms, such as A Map and Meituan. However, these platforms do not need a license but only distribute the passenger to various platform companies, and then the platform company dispatch the drivers. As an institution that provides passengers, the platform should only bear the responsibility for the safe operation of the software. The liability for infringement of passengers and the third person shall still be assumed by the cooperative platform company. The allocation of legal responsibility can effectively change the interest structure and institutional expectation of market entities, thereby effectively exerting regulatory functions and optimizing the institutional system of the business environment. The key target of the legal regulation of the online ride-hailing model should be the online ride-hailing platform company. By rationally configuring the civil responsibility that the online ride-hailing platform company should bear, the platform responsibility can be clarified. The platform company is forced to make full use of the risk control advantage and take the initiative to improve private regulatory methods such as self-regulation and industry regulation to reduce the occurrence of online ride-hailing traffic accidents. Although when an online ride-hailing platform company acts as a defendant, it often defends based on the risk of market behavior and the principle of private law autonomy. However, this defense ignores the platform’s strong position and various unreasonable factors. As a result, the principle of private law autonomy has become an excuse for strong economic subjects to deprive the weaker or shirk the social responsibility. The exercise of rights and the freedom of contract should be restricted by ‘contract justice’. Otherwise, the online ride-hailing driver and the consumer cannot enjoy the true freedom of contract, but often accept unreasonable standard terms. The organic integration of administrative regulations and tort liability regulations can effectively solve the dual dilemma of ‘market failure’ and ‘government failure’, and can effectively protect the safety right of online ride-hailing passengers (consumers). In conclusion, when an online ride-hailing traffic accident occurs, it is necessary to determine the civil liability of the online ride-hailing platform, the driver, and the third person in the traffic accident based on the actual situation of the online ride-hailing operation.