The new terms and conditions of SafeBoda Uganda have caused debate over it’s obligations to customers and riders. SafeBoda entered the Ugandan market as a breath of fresh air. For years, the motor cycle (BodaBoda) industry had no organized structure. Bodaboda riders were mainly accountable to themselves if they owned a motorcycle or to the motorcycle owner incase they didn’t own one. With SafeBoda Uganda came a corporate entity with organized structures that could operate the BodaBoda industry in an organized way. Like any other corporate entity, its aim was to provide a much needed service while earning profits. Thus in as much as SafeBoda Uganda has revolutionised the BodaBoda industry and provided a much needed transport service to Ugandans, the underlying goal of SafeBoda Uganda is to realize profits for it’s shareholders.
Nature of Terms and Conditions
SafeBoda Uganda’s new terms and conditions aim at excluding liability and compensation to third parties as a result of it’s acts or omissions. The terms and conditions are couched in a manner that absolves SafeBoda Uganda of any liability whatsoever. Clause 4 of the passenger terms and conditions and clause 3 of the general terms and conditions in particular provide for the exclusion of liability.
Legality of Exclusion Clauses
Exclusion of liability is subject to the doctrine of fundamental breach and the contraproferuntum rule. The former presupposes that a party cannot be absolved of a breach of contract that goes to the root of the contract and the later presupposes that a term of a contract that excludes liability is interpreted against it’s maker. In George Mitchell (Chesterhall ) Ltd v Finney Lock Seeds Ltd  2 AC 803, the House of Lords had the occasion to discuss the doctrine of fundamental breach and contraproferuntum rule. Finney Lock Seeds Limited had contracted to supply cabbage seeds to George Mitchell Limited. Finney Lock Seeds Limited had excluded liability for any resultant loss suffered by George Mitchell Limited as a result of using the seeds and only accepted liability if the seeds were damaged. The seeds were not damaged but most of them didn’t germinate leading to George Mitchell Limited suffering loss. The House of Lords held that the exclusion clause had to be interpreted against Finney Lock Seeds Limited and it was thus liable because the exclusion clause was unreasonable and could not come to the aid of Finney Lock Seeds Limited for a fundamental breach of a contract.
Legality of Categorization of riders
Aside from the general exclusion of liability in the terms and conditions, SafeBoda riders are categorized as independent service providers and not employees. The terms and conditions provide that the relationship between SafeBoda and it’s riders is not a contract for service and that the riders are independent service providers. This is despite the fact that SafeBoda riders are allocated customers by SafeBoda , their remuneration is dictated by SafeBoda and they are disciplined by SafeBoda whenever complaints are made against them by denying them access to the SafeBoda application. In essence the above establishes a master-servant relationship. One of the ways of determining a master-servant relationship is the control test. In Uber BV v Aslam  EWCA 2748, the United Kingdom Court of Appeal had the occasion of discussing the master-servant relationship and the control test. That case concerned the nature of the relationship between Uber and Uber Drivers. Uber contended that it’s drivers were not employees but independent contractors and thus couldn’t enjoy the benefits of the Employment Act that included minimum wage and annual leave. The drivers contended that they were employees and thus were entitled to the benefits of Employment Act. The court observed that Uber drivers were empoyees of Uber and not independent contractors and were thus entitled to the benefits of Employment Act. In arriving at this conclusion , court considered that Uber determined the trips that the drivers made, the renumeration that they were paid, the car that the drivers used and also disciplined the drivers as a result of complaints made against them. The court also observed that if a master-servant relationship exists between parties, an employer and employee relationship exists between those parties and it’s immaterial what an agreement by the parties refers their relationship to.
In sum, the new terms and conditions set by SafeBoda Uganda are very draconian and will have a ripple effect on the transport industry in Uganda. However such is not surprising given the state of corporate governance in Uganda that is informed by laxity in regulation and oversight especially with regards to foreign direct investment and lack of a competition law regime.