Ride Sharing Accident Liability
Uber and Lyft Are Skirting Accident Liability
In recent years, ride-sharing companies like Uber and Lyft have become titans in the transportation industry, seemingly making billions of dollars overnight and giving taxi companies a run for their money. Their app-based business model gives them an edge in today’s digital world, as more and more people are using their smartphones to complete transactions for a growing variety of products and services. However, not only are Uber and Lyft contributing to the now trending “sharing economy,” but they are also presenting a slew of complex liability issues. For instance:
- Are passengers covered by Uber/Lyft insurance?
- Who is liable if an Uber driver hits another car or a pedestrian?
- What happens if a third party is involved in the accident?
While these issues are still being hashed out in various legal disputes and will continue to develop for years to come, Uber and Lyft have recently come under pressure, especially in California, to eliminate any ambiguity in their policies and regulations regarding insurance coverage in case of an accident.
How Past Accident Cases Are Effecting Changes in Rideshare Company Policies
Last New Year’s Eve, a six-year-old girl was killed when an Uber driver struck her along with her mother and brother at a crosswalk. In November 2014, a Lyft driver transporting two young men swerved to avoid a stalled car and hit a tree, killing one of the passengers, a 24-year-old Sacramento citizen. These tragic stories received extensive media coverage and attracted national attention, causing scrutiny of ride-sharing companies to intensify.
In California, a state which tens of thousands of Uber and Lyft employees call home, Governor Jerry Brown signed ridesharing insurance legislation requiring companies to cover drivers from the moment they turn on their app. Since then, many other state legislators have followed suit, forcing the two major ride-sharing companies to concede to some of their demands, including expanding coverage to drivers who are logged into their apps at the time of an accident.
What Insurance Coverage Does Uber and Lyft Have Today?
As of today, both Uber and Lyft provide $1 million of liability coverage along with $1 million of uninsured/underinsured motorist coverage. However, this coverage only applies to cases involving injuries to passengers. What about accidents involving other vehicles, pedestrians, bicyclists, and the like, that occur when the driver is on call?
As previously mentioned, drivers for both companies DO receive coverage as long as they are logged onto the app. Whether the coverage is adequate is another matter. Since commercial insurance is expensive, Uber and Lyft are doing everything they can to encourage drivers to get a personal injury policy. In fact, they recently announced a partnership with Metromile to sell a personal insurance policy that provides extra coverage during the gap period by using an in-car sensor to monitor driving. Also, insurers including Farmers’ Insurance, USAA, and Geico are coming up with their own special ride-sharing policies.
DENVER, CO. – FEBRUARY 10: Kevin Labonte, owner of Special Times Limousine, supplements his own fares with those he contracts out from Uber. State legislators may enact proposed changes supported by the taxi community that say Uber is an unregulated service. Though not regulated, Uber merely connects private drivers, who comply with all PUC regulations, to customers. (Photo By AAron Ontiveroz/The Denver Post)[/caption]This can become a problem when damages exceed the coverage provided by the driver’s policy – not an uncommon scenario when it comes to personal insurance. Since Uber and Lyft only provide uninsured/underinsured motorist coverage in their respective rider policies (passenger coverage), victims of on-call accidents are left to fend for themselves financially if the driver does not have adequate coverage.
And There’s More
We have extensively discussed liability issues surrounding ride-sharing companies and traffic accidents. But we haven’t even begun to cover cases involving assault, battery, sexual assault, or direct property damage committed by employees. This raises the question of whether Uber and Lyft are responsible for the criminal conduct of their drivers; however, this is an issue to be discussed in a future article.
Protect Your Rights
If you have been the victim of an accident involving a ride-sharing company driver and are in dire need of financial and legal support, call Wilshire Law Firm toll-free at (800) 522-7274. Our excellent attorneys can evaluate your claim, let you know where you stand, and fight to get you full and fair compensation for your losses.