Uber Everyone's Private Driver: Efficiency Optimization of the Legal Conditions at Uber

Abstract

The subject of this master thesis concerns the sharing-economy provider Uber and their contractual relationships with their drivers. Uber provides a digital platform where private individuals have the opportunity to utilize excess resources of empty passenger seats in private cars. New technology challenges existing legislation and increases pressure on the ability to adapt. Uber is doubtless the most mentioned and most controversial provider of sharing-economy platforms, and challenges the Danish legislation to adapt. The contractual relationship, in particular the relationship between the driver and Uber, are challenging to categorize under Danish law. The legal status of Uber and their drivers remains unclear, and the legal framework is still unknown. The thesis does not attempt to assess whether Uber is illegal in the Danish market, but seeks rather on the basis of contractual framework to derive the law and to evaluate whether the current contractual rights are efficient. The thesis will primarily seek to create a connection between the derivation of the law and the legal-economic method related hereto. The connection will be the basis for analysing and determining whether the current regulation is efficient as well as inefficient. Economic theory will form the base of the connection in order to commence the economic phase from a scientifically perspective – with a realistic and practical perspective. Legally, the driver and Uber’s individual legal position are grey areas. The contractual relationship can according to applicable law be both categorized as an employment relationship, but also simply as a cooperation between two independent parties. Uncertain legal positions are not proper from a legal and market perspective, which is why the applicable law is considered to be inefficient. The solution to inefficiency is derived in the economic analysis to be in the combination of legislation and negotiations. If the rights are well defined and allows the parties to negotiate, then the contractual relationships between Uber and their drivers will be economic efficient. Further, the sharing economic platform at Uber has the possibility of becoming the emblem of the perfect economy. The thesis is presented in a conjunction with the legal analysis and the legal-economic analysis, which is targeted to provide an indicator of whether it is possible to optimize the contractual relationship on the basis of already emitted theoretical and practical results