Vicarious Liability in the Gig Economy: A Tort Law Study on Food Delivery and Ride-Sharing Platforms

Abstract

The gig economy, dominated by food delivery and ride-sharing platforms such as Zomato, Swiggy, Ola, and Uber, has fundamentally reshaped urban services in India. This transformation, however, presents a significant challenge to traditional tort law principles, particularly vicarious liability. By classifying their drivers and riders as ‘independent contractors’ or ‘partners,’ these platforms strategically distance themselves from liability for tortious acts—such as negligent driving or assault—committed by their workforce, leaving victims with limited legal recourse.

This paper critically examines the applicability of vicarious liability to these gig economy giants. It delves into foundational Indian precedents while drawing persuasive authority from landmark international judgments that are shaping this discourse globally. A key reference is the UK Supreme Court’s decision in Uber BV v Aslam, which set a powerful precedent for looking beyond contractual formalities to the reality of worker control and subordination. Furthermore, this study analyses direct legislative interventions like Spain’s “Riders’ Law,” which created a legal presumption of employment, showcasing a definitive path to establishing liability.

Translating these global trends to the domestic context, the paper explores the emerging Indian legal landscape, with a special focus on the pioneering Karnataka Platform-Based Gig Workers Act. This legislation serves as a crucial acknowledgement of the platforms’ responsibility towards their workforce. By applying these evolving legal principles to realistic case studies, this study concludes that there is a compelling basis for holding platforms vicariously liable. It calls for a purposive judicial and legislative approach that ensures the law remains adaptive to the evolving dynamics of the modern economy and provides an effective remedy for tort victims.

Introduction

• The Gig Economy: A New Socio-Economic Reality

In cities like Visakhapatnam and across India, the urban landscape has been irrevocably altered by the rise of the digital platform economy. Services that were once informal or required significant effort are now available at the tap of a button. Companies like Zomato, Swiggy, Ola, Uber, and Rapido have become verbs in our daily lexicon, representing a paradigm shift in consumption, convenience, and labour. This “gig economy” is built upon a vast, flexible workforce of millions of drivers and delivery riders who form the backbone of these multi-billion dollar enterprises. The gig economy workforce is projected to reach 23.5 million by 2029-30, according to a NITI Aayog[1] report.

• The Legal Paradox: Partners in Name, Servants in Practice

Despite their critical role, these workers exist in a state of legal ambiguity. The platforms meticulously craft their contracts and branding to portray their workforce not as employees, but as “partners,” “freelancers,” or “independent contractors”. This classification is a deliberate legal strategy designed to divest the company of responsibilities such as minimum wage, social security, and, most critically for this study, vicarious liability for the tortious acts of its workers. This creates a paradox: a company can exercise immense, algorithmically-driven control over a worker’s conduct, yet claim complete detachment when that conduct causes harm to a third party. The COVID-19 pandemic further exposed the vulnerabilities of this workforce, highlighting the urgent need for protective legislation.

• Vicarious Liability: The Principle and its Purpose

Vicarious liability is a common law doctrine, encapsulated in the Latin maxim Qui facit per alium facit per se [2](He who acts through another does the act himself). It holds an employer (master) liable for the wrongful acts of their employee (servant) committed within the course of employment. The principle is not based on the employer’s own fault but on public policy. Its primary justifications are:

• Victim Compensation: The employer typically has the “deeper pockets” and is better positioned to compensate the victim.
• Deterrence: Holding the employer liable incentivises them to properly train, supervise, and control their employees to prevent future harm.
• Risk Distribution: The employer profits from the business enterprise and should therefore bear the inherent risks associated with it, which can be distributed as a cost of doing business.

Research Questions and Methodology

This Article seeks to resolve the conflict between the gig economy’s business model and the principles of tort law. It is guided by the following research questions:

• Can the traditional master-servant framework of tort law accommodate the unique structure of the gig economy?
• How do platform defences, such as the ‘intermediary’ status under the IT Act, intersect with tortious liability?
• What legislative or judicial reforms are necessary to address this legal ambiguity?

The methodology employed is primarily doctrinal and analytical, involving a critical review of existing statutes, foundational Indian case law, and comparative international precedents. This legal framework will then be applied to hypothetical case studies to test its applicability in real-world scenarios.

Foundations of Vicarious Liability in Tort Law

• The Cornerstone: The Master-Servant Relationship

“The entire edifice of vicarious liability rests upon the existence of a master-servant, or employer-employee, relationship. An employer is generally not liable for the torts of an independent contractor who is engaged to perform a certain task but retains discretion over the manner in which it is executed. Thus, the central battleground in gig economy litigation is this very classification.”[3]

• Judicial Tests for Determining Employment

Indian courts, over decades, have developed several tests to look beyond mere labels and determine the true nature of a working relationship.

• The Control Test: The traditional and most stringent test, it asks whether the employer has the right to control not just what work is to be done, but how it is to be done. While its rigidity has been softened, the element of control remains a primary indicator.
• The Integration Test: This test examines whether the worker is an integral part of the business. For example, a driver is not merely an accessory to Uber’s business; they are fundamental to its core function of providing transportation.
• The Economic Reality (Multiple) Test: This is the modern, holistic approach. The court considers a range of factors, including: who owns the essential tools (car/bike), who bears the financial risk, the degree of the worker’s financial dependence, and the structure of payment.[4]
• The “Course of Employment”: Defining the Boundaries of Liability

Even if an employment relationship is established, the employer is only liable if the wrongful act was committed “in the course of employment”. This includes acts authorized by the employer and, more commonly, a wrongful and unauthorized mode of doing an act authorized by the employer. However, if the employee’s act is entirely personal and disconnected from their duties, it is considered a “frolic of his own,” and the employer is not liable.

Foundational Indian Case Law

• Dharangadhra Chemical Works Ltd. v. State of Saurashtra (1957)[5]: The Supreme Court established the primacy of the ‘right to control the manner of work’ as the key determinant of an employment relationship.
• Silver Jubilee Tailoring House v. Chief Inspector of Shops (1973)[6]: The Court moved beyond a singular focus on control, acknowledging that in a complex economy, a multi-faceted approach considering factors like ownership of equipment and economic integration is necessary.
• Smt. Savita Garg v. National Heart Institute (2004)[7]: The Supreme Court held a hospital vicariously liable for the negligence of its doctors, affirming that institutions are liable for the professional actions of those providing their core services. The doctor’s negligence was an improper way of performing their authorized duty.
• State Bank of India v. Shyama Devi (1978)[8]: The Court held that a bank was not liable when its employee misappropriated funds from a customer away from the bank’s premises, as this act was not within his authorized scope of duties and was a personal act of fraud.
• Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt (1966)[9]: The Supreme Court held a car owner not liable when a driver, entrusted with the car for a different purpose, took it for an unauthorized joyride and caused an accident. This was deemed a classic “frolic of his own,” completely detached from his employment.

  A Global Perspective: Comparative Legal Approaches

The United Kingdom: The Emergence of the “Worker”

In the landmark case of Uber BV v Aslam (2021)[10], the UK Supreme Court unanimously ruled that Uber drivers are not independent contractors but fall into a third category of “workers”. The court disregarded the contractual language and focused on the reality of the relationship, highlighting five key factors demonstrating Uber’s control:

• Uber sets the fare, and the driver has no say in it.
• Uber dictates the contractual terms.
• The driver’s choice of accepting rides is constrained by Uber’s monitoring and penalty system.
• Uber exercises significant control over the way drivers deliver their service (e.g., via the rating system).
• Uber restricts communication between the passenger and driver, preventing the driver from forming a direct business relationship. This judgment provides powerful persuasive authority for looking beyond the contract to the operational reality.

The United States: The ABC Test and the Political Battle

In California, the case of Dynamex Operations West, Inc. v. Superior Court[11] established the stringent “ABC Test,” which presumes a worker is an employee unless the company can prove all three of the following: (A) The worker is free from the control and direction of the hiring entity , (B) The worker performs work that is outside the usual course of the hiring entity’s business , and (C) The worker is customarily engaged in an independently established trade or business. Gig economy platforms would almost certainly fail part (B). This led to a massive political campaign funded by Uber, Lyft, and DoorDash, resulting in Proposition 22, a ballot initiative that exempted them from this law, creating a new category with limited benefits[12]. This demonstrates the intense political and economic dimensions of the issue.

The European Union: A Push Towards Presumed Employment

The EU is moving towards an EU Directive on platform work. A key proposal is a legal presumption that a platform worker is an employee if the platform exercises a certain degree of control. This would shift the burden of proof to the platforms to prove that a worker is genuinely independent[13].

Lessons for the Indian Judiciary

The global trend is clear: judiciaries and legislatures are recognizing the imbalance of power and the fiction of the “independent contractor” model in the gig economy. The consistent theme is a move towards a substance-over-form analysis. These international developments provide a roadmap for Indian courts to interpret domestic law in a manner that addresses the realities of the 21st-century workforce.

  The Indian Conundrum: Labour Law Interface and Judicial Trends

• The Intersection of Labour Law and Tort Law

The determination of worker status, while context-specific, has persuasive value across legal domains. Historically, gig workers classified as “independent contractors” lacked access to social security benefits, job security, and formal grievance redressal mechanisms.

• The Code on Social Security, 2020: A Legislative Acknowledgement

The central government’s Code on Social Security, 2020, includes provisions for gig and platform workers. However, its implementation has been slow.

• Public Interest Litigation: The Voice of the Gig Worker

The PIL filed by the Indian Federation of App Based Transport Workers (IFAT) v. Union of India[14] in the Supreme Court is a pivotal moment in the discourse on worker rights.

The Karnataka Model: A Legislative Blueprint for Gig Worker Welfare

• In a landmark move, the Karnataka government enacted “The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025”[15].
• This is the country’s first comprehensive legal framework for the welfare of platform-based gig workers.
• The Act establishes a Karnataka Platform Based Gig Workers Welfare Board, a tripartite body with representatives from the government, aggregator platforms, and gig workers’ associations. A key feature is the creation of a Social Security and Welfare Fund, financed through a levy on aggregators, calculated as a percentage of each transaction. This fund is intended to cover benefits like accident insurance and health cover.
• The Act also mandates a formal grievance redressal mechanism to handle disputes over payments, incentives, and working conditions. This proactive stance by Karnataka could serve as an impetus for national-level rules.
• Experts have lauded the Act as a progressive intervention that sets a strong precedent for other states. By placing the onus of contribution on the aggregators who profit from their labour, the legislation acknowledges their responsibility towards the workforce.

Case Study Analysis: Torts on the Digital Street

Hypothetical Case 1: The Negligent Food Delivery (Zomato)

• Scenario:

Arjun, a Zomato delivery rider in Visakhapatnam, is having a slow day. He gets a notification for a “Flash Delivery” order with a bonus for completion within 20 minutes during a peak dinner rush. The app shows a ticking timer. To beat the clock and a potential bad rating for being late, Arjun drives his bike negligently, weaving through traffic on Beach Road. He runs a red light and collides with a pedestrian, Mrs. Lakshmi, causing a severe fracture. Zomato’s contract states Arjun is an independent “delivery partner.” Mrs. Lakshmi sues both Arjun and Zomato.

• Analysis:

• • Employment Relationship: A strong case for an employment relationship exists. Zomato exercises immense control (dictates pickup/drop-off, suggested route, time limit, payment) and Arjun is fully integrated into Zomato’s core business of food delivery. The economic reality is that Arjun is financially dependent on Zomato and bears the risks (fuel, vehicle maintenance) while Zomato reaps the larger profit.
  • Course of Employment: The negligence occurred while Arjun was performing the exact task he was engaged for. Crucially, his negligent act (speeding) was a direct and foreseeable consequence of the high-pressure conditions and incentives created by Zomato’s system. This is a classic example of an “improper mode of performing an authorized act,” as seen in Smt. Savita Garg. This is not a “frolic” like in Sitaram Motilal Kalal. Therefore, Zomato should be held vicariously liable.

Hypothetical Case 2: The Intentional Tort (Ola)

• Scenario:

 Priya books an Ola cab for her elderly mother. The driver, Rakesh, takes a longer route than suggested by the app. When Priya questions him at the destination, the final fare is higher than the initial estimate. An argument ensues over the inflated fare, which is set and processed by Ola. Rakesh becomes aggressive, uses abusive language, and shoves Priya’s mother, who falls and injures her wrist. Priya files a police complaint and sues Rakesh for assault and battery, and Ola for being vicariously liable.

• Analysis:

• • The Challenge: Intentional torts are harder to attribute to the employer. Ola’s defense would be that assault is a personal act, completely outside the scope of employment, akin to the fraud in State Bank of India v. Shyama Devi[16].
  • The “Close Connection” Test: The modern approach is to ask if the tort was so closely connected with the employment that it is fair and just to hold the employer liable. Here, the argument for liability is strong. The dispute was not personal; it arose directly from the core functions of the employment—the route taken and the fare charged, both of which are controlled by Ola’s platform. Rakesh’s aggression was a wrongful and violent response to a work-related conflict. The risk of such disputes is inherent in the taxi business, which Ola profits from.

Hypothetical Case 3: The Grey Area of “Idle Time” (Rapido)

• Scenario:

Sameer, a Rapido bike-taxi driver, has just completed a ride. He is logged into the app and receives a notification: “Demand is high in the MVP Colony area. Head there for more ride requests!”. While driving towards MVP Colony, not yet assigned a specific passenger, he is distracted by another app notification and collides with another bike. Can Rapido be held liable?

• Analysis:

• • The Boundary Question: Is a worker in the “course of employment” when they are not on an active paid task?
  • Argument for Liability: Yes. By directing Sameer to a specific geographical location for its own commercial benefit (to reduce wait times for customers and efficiently position its fleet), Rapido is exercising control, and he is acting on their instructions. His travel to the hotspot is not a personal errand; it is an integral part of the work required to be a successful driver on the platform. The accident is a direct result of his performing an action for the benefit of, and at the suggestion of, his de facto employer.

Platform Defences and Regulatory Realities

The Intermediary Defence: A Misapplication of the IT Act?

Platforms frequently argue that they are “intermediaries” protected by the safe harbour provisions of Section 79 of the Information Technology Act, 2000[17]. This section is designed to protect passive platforms from liability for third-party content. This defence is fundamentally flawed when applied to gig platforms. They are not passive conduits. They actively set prices and fares, vet and train drivers, monitor performance via ratings, dictate rules of conduct, and manage payments, taking a significant commission. They are active service providers, making the intermediary defence inappropriate.

The SaaS Model: A New Defence for Aggregators?

A notable operational shift by Uber in early 2025 could form the basis of a new defence. In cities like Pune, Uber introduced a Software-as-a-Service (SaaS) or zero-commission subscription model for its auto-rickshaw drivers. Under this system, drivers pay a subscription fee to use the app and retain 100% of the fare, which they negotiate directly with the rider. Payment is settled directly between the driver and rider, bypassing Uber’s payment system. Platforms could argue this model makes them a pure technology provider, distancing them further from the employment relationship. However, a court would likely still apply the control test, looking at factors like performance monitoring through ratings, route suggestions, and the platform’s ability to deactivate a driver, to determine the true nature of the relationship.

The Role of Mandatory Insurance: A Floor, Not a Ceiling

The Motor Vehicle Aggregator Guidelines, 2020[18], mandate that aggregators like Uber and Ola must provide health and term insurance for their drivers. Similarly, the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, will require contributions from aggregators to a social security fund for benefits like accident insurance and health coverage. While this is a positive step, it should not be confused with a substitute for vicarious liability. Insurance is a statutory, no-fault benefit scheme. Vicarious liability is a common law principle of tort that serves the dual purpose of corrective justice (making the victim whole) and deterrence (incentivizing the enterprise to be safer). The two can and should coexist. The insurance provides a floor of protection, but it does not absolve the platform of its broader common law liability for the wrongful acts of its workforce.

Conclusion and Recommendations for Reform

Summary of Findings

This study concludes that the “independent contractor” label used by food delivery and ride-sharing platforms is a legal fiction designed to abdicate responsibility. A thorough analysis using the established judicial tests of control, integration, and economic reality demonstrates that a de facto master-servant relationship exists between the platforms and their workers. The high degree of algorithmic control, performance management, and financial dependency makes it clear that these workers are not independent entrepreneurs but are cogs in a larger, centrally-controlled machine. Consequently, there is a strong and justifiable legal basis for holding these platforms vicariously liable for the torts committed by their riders and drivers in the course of their employment.

The Judicial Path Forward: Substance Over Form

Indian courts should be encouraged to adopt a purposive and realistic approach. They must look past the carefully worded contracts and focus on the substantive reality of the working relationship. Drawing inspiration from the global trend seen in the UK and EU, the judiciary has the power to declare that where a company controls the work, it must also bear the responsibility for its consequences.

Legislative Recommendations

While courts can act, legislative clarity would provide a more stable and uniform solution. Two potential reforms are recommended:

• Create a “Dependent Contractor” Category: The legislature could amend labour and tort laws to create a third category of worker, sitting between an employee and an independent contractor. This would grant essential protections, including the application of vicarious liability, to workers who, while having some flexibility, are economically dependent on and substantively controlled by a platform.
• Introduce a Rebuttable Presumption of Employment: A simpler and more powerful reform would be to introduce a legal presumption that a gig worker is an employee for the purposes of tort liability. The burden of proof would then shift to the platform to prove that the worker was genuinely running an independent business, free from its control—a bar that, in most cases, they would be unable to meet. The Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025[19], serves as an excellent model for such legislative action. Its establishment of a platform-funded welfare model acknowledges the responsibility of aggregators towards their workforce and sets a strong precedent for national legislation.

In conclusion, the law must adapt to protect citizens from the risks created by new and powerful business models. Holding gig economy platforms vicariously liable is not a radical step; it is the logical application of a century-old legal principle to a 21st-century reality.

Bibliography

Cases:

• National Institution for Transforming India (NITI) Aayog, ‘India’s Booming Gig and Platform Economy’ (2022).
• Ratanlal & Dhirajlal, The Law of Torts, 28th ed., LexisNexis
• Dharangadhra Chemical Works Ltd. v. State of Saurashtra, AIR 1957 SC 264.
• Dynamex Operations West, Inc. v. Superior Court, 4 Cal.5th 903 (2018).
• Indian Federation of App Based Transport Workers (IFAT) v. Union of India, W.P.(C) No. 1068/2021.
• Silver Jubilee Tailoring House v. Chief Inspector of Shops, AIR 1974 SC 37.
• Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt, AIR 1966 SC 1697.
• Smt. Savita Garg v. The Director, National Heart Institute, (2004) 8 SCC 56.
• State Bank of India v. Shyama Devi, AIR 1978 SC 1263.
• Uber BV v Aslam, [2021] UKSC 5 (Eng.).
• Dynamex Operations W., Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018).
• PROP. 22, Protect App-Based Drivers and Services Act of 2020.
• Indian Fed’n of App Based Transp. Workers (IFAT) v. Union of India, W.P. (C) No. 1068 of 2021 (pending).
• Motor Vehicle Aggregator Guidelines, 2020 (Ministry of Road Transport and Highways, Notification S.O. 4251(E) of Nov. 27, 2020).

Statutes and Guidelines:

• The Code on Social Security, 2020 (India).
• The Information Technology Act, 2000 (India).
• The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025.
• Motor Vehicle Aggregator Guidelines, 2020 (India).

Reports and Other Materials:

• National Institution for Transforming India (NITI) Aayog, ‘India’s Booming Gig and Platform Economy’ (2022).
• ‘Uber Navigates a Shifting Landscape for Gig Workers in 2025, Dominated by Regulatory Changes and a New Model for Auto-Rickshaws’ (Internal Project Resource, 2025).

 [1] National Institution for Transforming India (NITI) Aayog, ‘India’s Booming Gig and Platform Economy’ (2022).

[2] Ratanlal & Dhirajlal, The Law of Torts, 28th ed., LexisNexis, p.

[3]RATANL

AL & DHIRAJLAL, THE LAW OF TORTS (LexisNexis, 28th ed. 2019).

[4] RATANLAL & DHIRAJLAL, THE LAW OF TORTS (LexisNexis, 28th ed. 2019).and the employer is not liable

[5] A.I.R. 1957 S.C. 264 (India).

[6] A.I.R. 1974 S.C. 37 (India).

[7] (2004) 8 S.C.C. 56 (India).

[8] A.I.R. 1978 S.C. 1263 (India).

[9] Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt, A.I.R. 1966 S.C. 1697.

[10] Uber BV v. Aslam, [2021] UKSC 5 (Eng.).

[11] Dynamex Operations W., Inc. v. Superior Court, 416 P.3d 1 (Cal. 2018).

[12] CAL. PROP. 22, Protect App-Based Drivers and Services Act of 2020.

[13] Proposal for a Directive of the European Parliament and of the Council on improving working conditions in platform work, COM (2021) 762 final (Dec. 9, 2021).

[14] Indian Fed’n of App Based Transp. Workers (IFAT) v. Union of India, W.P. (C) No. 1068 of 2021 (pending).

[15] The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 (India).

[16] A.I.R. 1978 S.C. 1263 (India).

[17] The Information Technology Act, 2000, No. 21 of 2000 (India).

[18] Motor Vehicle Aggregator Guidelines, 2020 (Ministry of Road Transport and Highways, Notification S.O. 4251(E) of Nov. 27, 2020).

[19] The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 (India).