Uber was ordered to pay $40m to the parents of a 23-year-old woman who was killed after a driver kicked her and a friend out of his car by the side of a California freeway, according to newly public arbitration documents.

An arbitrator, retired Calfornia judge Richard A Stone, found that the ride-share company was “vicariously liable” for the driver’s negligence.

In August 2023, two women, Emily Normandin-Parker and Luna Moore, hailed an Uber after a night out in Orange county. The driver pulled over on the 73 freeway after Normandin-Parker vomited in the car, attorneys said. While Moore and the driver argued over a cleaning fee, Normandin-Parker got out of the car, wandered into oncoming traffic and was struck by a car.

Normandin-Parker’s parents accused the driver and Uber of negligence. The company argued it was just “a technology company that provides a software platform connecting riders with independent third-party drivers who perform the transportation”. In California, under Prop 22, Uber and Lyft drivers were categorized as independent contractors – not employees of the companies – a designation the company has used to argue it is not liable for the actions of its drivers. However, the arbitrator rejected Uber’s argument that it should be treated as a platform that merely connects drivers and riders.

In arbitration documents released by the family’s attorney on Thursday, Stone wrote that Uber should be treated as a common carrier – which is any entity or individual that transports people or goods – and thus should be held “vicariously liable” for the incident. Vicarious liability is when one party is held liable for the negligence or actions of another party that it has a relationship with.

“The fact that Uber uses a digital interface rather than street hails does not change the fundamental nature of the service being offered,” the arbitration documents read. Stone further asserted Prop 22 does “not immunize Uber from vicarious liability for the torts of its drivers stands”.

Uber said that while the company respects the arbitration process, the arbitrator “was wrong in holding Uber legally responsible for the tragic events of that night”.

“No family should have to suffer the loss of a child, and our thoughts continue to be with the Normandin-Parker family,” said Uber spokesperson Gabriela Condarco-Quesada. “We have continued to strengthen our approach to safety over the years, through new technology, policies and safeguards informed by safety experts, including additional guidance to drivers about avoiding drop-offs in unsafe locations.”

The family further asserted that Uber at one point proposed a settlement that included a confidentiality agreement. As part of that agreement, the family said they would have been charged a $10m penalty any time they spoke about the accident and Uber’s connection to it. The family said they rejected the settlement and Uber said it “ultimately did not pursue confidentiality in this case”.

The ruling to hold Uber liable for the negligence or actions of its drivers is not binding and applies only to this case. However, the case is part of the company’s battle to be treated as merely an online marketplace for rides and in doing so distance themselves from the actions of their drivers by treating them as contractors rather than employees.