John Roach, Esq. | February 16, 2026 | Attorney Tips \ California Law \ Car Accidents

Can Uber or Lyft Be Held Liable for Driver Negligence in California After Prop 22?

Rideshare accidents happen frequently on California roads, raising important questions about rideshare accident liability under California Prop 22. Many involve Uber or Lyft drivers. Injured victims often wonder about holding the companies accountable beyond just the driver. Key questions arise: Can you sue Uber or Lyft for negligent hiring or retention? What happens if the company admits vicarious liability for the driver’s actions? Does Proposition 22 change these rules?

This post outlines the current California law, drawing from key court decisions and statutes. For those injured in a rideshare crash, grasping these concepts is essential to pursuing fair compensation—especially in high-value cases exceeding $1 million.

Vicarious Liability and the Diaz Rule

California adheres to a principle established by the Supreme Court in Diaz v. Carcamo (2011) 51 Cal.4th 1148. When an employer admits vicarious liability—accepting responsibility for an employee’s negligent driving—claims such as negligent hiring, retention, or entrustment are typically barred.

The Court explained that these direct negligence claims are essentially identical to vicarious liability in driving-related incidents. Permitting both could result in unfair double liability under California’s comparative fault system, where the employer might face additional fault beyond what it has already accepted for the employee’s conduct.

Rideshare companies like Uber and Lyft frequently admit vicarious liability as a strategy. This move often eliminates allegations that the company negligently hired or retained an unfit driver, rendering such claims unnecessary once vicarious liability addresses the driver’s actions.

What Negligent Hiring and Retention Require

Under California law, negligent hiring and retention constitute direct liability. An employer may be held accountable if it knew—or should have known—that a driver presented an unreasonable risk. This obligation arises from Civil Code section 1714, which mandates ordinary care to prevent harm to others.

To prevail on these claims, demonstrate that the company breached its duty during screening or retention, and that this breach caused your injuries. Rideshare firms must perform background checks pursuant to Public Utilities Code section 5445.2. Violations could bolster a claim—unless the Diaz rule intervenes due to an admission of vicarious liability.

Notably, negligent hiring claims can open the door to punitive damages under Civil Code section 3294 if the company showed conscious disregard for safety. However, the Diaz bar often closes this avenue, limiting recovery options in severe cases.

Proposition 22 and Driver Classification

In 2020, voters passed Proposition 22, classifying app-based drivers as independent contractors provided companies satisfy conditions like avoiding mandated schedules or ride acceptances (Business & Professions Code § 7451).

The California Supreme Court affirmed Prop 22’s constitutionality in Castellanos v. State of California (2024) 16 Cal.5th 588. The initiative emphasizes labor rights, benefits, and classification, addressing concerns from AB 5 while maintaining gig economy flexibility.

Prop 22 does not directly modify tort liability for third-party victims, such as passengers or other motorists.

Does Prop 22 Block Negligent Hiring Claims?

For claims brought by injured drivers against the company, Prop 22’s independent contractor designation offers extra protection. Per Camargo v. Tjaarda Dairy (2001) 25 Cal.4th 1235, hirers generally evade negligent hiring liability regarding independent contractors’ employees, rooted in workers’ compensation principles.

This safeguard primarily affects driver claims, not those from third parties like passengers, pedestrians, or other road users. Courts have clarified that Camargo does not preclude third-party negligent hiring actions.

Crucially, Prop 22 preserves vicarious and direct liability frameworks for public safety. Public Utilities Code section 5354 attributes driver actions to the company, viewing them as the carrier’s own. Common carrier obligations under Civil Code section 2100 demand the highest care for passengers. Prop 22’s intent, as reflected in its text, ballot arguments, and judicial reviews, was never to restrict these tort remedies—it targets labor issues narrowly.

Legal analysts emphasize that Prop 22 was not designed to absolve companies of responsibility for driver negligence. These firms profit from rides and exert control through features like routing and performance ratings, justifying their accountability.

Insurance Policy Limits for Rideshare Drivers and Company Coverage

Understanding insurance is critical, particularly for injuries valued over $1 million. Rideshare drivers carry personal auto insurance, but coverage gaps arise during commercial use. California law, bolstered by Prop 22 and recent updates like Senate Bill 371 (effective January 1, 2026), mandates that companies like Uber and Lyft provide layered insurance.

Coverage varies by “periods” of app activity:

  • Period 1 (App on, waiting for a ride): Limited liability—typically $50,000 per person for bodily injury, $100,000 per accident, and $30,000 for property damage. Companies also maintain $200,000 in excess liability for severe incidents.
  • Periods 2 and 3 (Ride accepted or passenger aboard): $1 million in third-party liability coverage for injuries or property damage caused by the driver. Uninsured/underinsured motorist (UM/UIM) coverage, reduced under SB 371, now stands at $60,000 per person and $300,000 per accident.

Prop 22 requires companies to offer occupational accident insurance for drivers, covering up to $1 million in medical expenses and disability benefits (e.g., 66% of average weekly earnings, up to $500 weekly). This protects drivers but does not directly apply to third-party victims.

For victims, the company’s $1 million liability policy is key—it far exceeds typical personal auto limits (often $15,000–$100,000). When vicarious liability applies, this corporate insurance kicks in, providing deeper pockets than suing the driver alone.

In high-value claims surpassing $1 million—common in catastrophic injuries like spine injuries, brain injuries, or wrongful death—accessing the company’s assets becomes vital. Even if negligent hiring claims are barred under Diaz, vicarious liability allows pursuit of the full judgment against the company. Companies hold substantial assets and additional insurance layers, enabling recovery beyond stated policy limits in extreme cases. However, the Diaz rule’s restriction on negligent hiring can limit punitive damages, making strategic litigation essential to maximize compensation.

When Negligent Hiring Claims Remain Viable

Should Uber or Lyft dispute vicarious liability—perhaps contending the driver was not engaged via the app—negligent hiring claims persist. Establish standalone company negligence, such as flawed background checks or overlooked violations.

Even with admissions, consider alternative theories if evidence reveals distinct misconduct. Statutory screening duties offer potential leverage when violated.

What This Means for Injury Victims

Rideshare companies continue to bear liability for driver negligence in most scenarios. Prop 22 secures driver classification for benefits but does not insulate firms from public tort claims. While the Diaz rule curbs additional claims upon vicarious liability admission, fundamental responsibility—and access to robust insurance—endures.

Act promptly post-accident: Document the scene, capture driver and app information, and obtain medical care. A skilled attorney can evaluate if negligent hiring fits or if vicarious liability sufficiently addresses your damages, especially in claims over $1 million where company assets matter.

Get Help from Law Office of John J. Roach

If a California Uber or Lyft accident injured you, avoid assuming Prop 22 restricts your recovery. Companies still confront substantial liability, backed by significant insurance and resources.

John Roach, Esq. advocates for victims in these intricate cases, striving for maximum compensation. Reach out today for a free consultation at RepresentMyInjury.com. Your recovery is our priority—allow us to ensure accountable parties pay.