Ride-sharing services such as Lyft and Uber have been popping up all over the country, offering an alternative to the traditional yellow cab. The general ease of use makes it obvious why these programs have become so popular: anyone in need of a ride has to do little more than press a button on their smartphone to have a nearby driver pick them up. However, as the ride-sharing industry has rapidly expanded, critics have pointed to holes in the model that could potentially leave passengers or pedestrians who are injured by a rideshare driver paying for their own medical bills.
States and Taxi Services Accuse Ride-Shares of Being Underinsured
According to an NBC News report, 14 states and the District of Columbia have already issued warnings that services such as Lyft, Sidecar, and Uber may not provide adequate coverage to passengers if one of their drivers gets into an accident. Ride-share liability is not as straightforward as taxi cab liability because companies like Uber employ non-professional drivers who use their own cars to transport passengers. These drivers carry their own personal auto insurance, but insurance companies will typically deny the claims of any injured passengers on the basis that the driver was operating “for profit.” In this type of situation, an injured passenger might have to rely on their own auto insurance—but if they don’t have auto insurance because they don’t drive (a very real possibility since they’re using a ride-sharing service in the first place), then they’re out of luck.
To make matters worse, relatively lax requirements for rideshare drivers means that even someone who has a record of accidents or traffic infractions could still potentially work for a service like UberX (Uber’s budget offshoot). And, because the industry is relatively new and not yet strictly governed, many drivers are actually hiding their for-profit status from their insurers to avoid paying higher rates, which could leave injured passengers or pedestrians in a complex and confusing situation when trying to figure out who exactly will cover their medical expenses.
Lyft and Uber Should Cover Damages When Personal Insurance Will Not
Representatives for Lyft, Uber, and Sidecar have all responded to accusations that their drivers are underinsured by stating that their companies provide excess coverage beyond the driver’s personal auto insurance. What that means is that if the driver’s insurance won’t cover medical costs, the company itself will step in and provide the necessary compensation. Lyft, for example, offers coverage up to $1,000,000. This is in comparison to traditional taxi companies, which are only required to cover up to $125,000 in Florida. The major rideshare companies have also stressed that unlike most taxi companies, they will cover the cost of an accident even when another driver got into an accident with a rideshare driver and injured a passenger.
Some Problems in RideShare Industry Still Unresolved
Based on the liability policies of Lyft, Uber, and Sidecar, it appears that rideshare organizations actually do a better job than the average cab company when it comes to providing insurance for passengers. However, because the industry is relatively new, there are still some potential loopholes and issues that have yet to be resolved.
For example, when a Uber driver in San Francisco struck and killed a 6-year-old girl on New Year’s Eve, Uber sidestepped liability by claiming that the driver had not been “on duty” when the accident occurred (the driver was running the Uber app on his phone, but he did not have any passengers in the vehicle at the time). Since this tragedy, Uber has changed their policy to provide coverage for accidents that occur when drivers are in-between passengers, but they only provide this coverage if the driver has also secured full coverage on their personal policy.
The general problems with the rideshare industry are perhaps best highlighted by New Jersey Insurance Commissioner Ken Kobylowski, who said in a statement released to NBC: “Being covered by different policies for different uses of the vehicle is a new concept that has not been tested under our state’s laws and in our courts.” Because of this, rideshare liability remains complicated. States are beginning to outline rideshare regulations that may help reduce some of these complications, but the change certainly won’t occur overnight.
In the meantime, if you or a loved one is injured as a rideshare passenger and have had your insurance claim denied, the best thing you can do is contact an auto accident lawyer who has experience going up against big companies like Uber. You should not be held responsible for covering your own medical expenses when you were a passenger paying to use one of these rideshare services.
About the Author:
Andrew Winston is a partner at the personal injury law firm of Lawlor Winston White & Murphey. He has been recognized for excellence in the representation of injured clients by admission to the Million Dollar Advocates Forum, is AV Rated by the Martindale-Hubbell Law Directory, and was recently voted by his peers as a Florida “SuperLawyer”—an honor reserved for the top 5% of lawyers in the state—and to Florida Trend’s “Legal Elite.”