Taxi companies are facing stiff competition from ride-sharing programs like Uber and Lyft, which employ regular people as drivers who use their own vehicles. People who need rides can use the companies’ apps to hail the closest available vehicle. The price of an Uber ride shifts depending on demand at the time, and Lyft drivers depend on “donations” from their passengers. However, these new businesses have created confusion about how laws apply to them, and which regulatory agencies have governance over them.
Both companies require drivers to carry insurance, and they do provide some additional coverage options. However, legality and liability are both fairly cloudy in in this new industry. Some insurance providers may not provide coverage when you are using your private vehicle for commercial use. Governing agencies disagree on whether to treat these agencies like taxis, upholding them to the same regulations.
Uber and Lyft drivers are not full-time employees of those companies. Instead, they are independent contractors driving on behalf of the company. Each state has different laws for commercial drivers, and some may define Uber drivers as commercial drivers, who would then need to obtain a commercial driver’s license.
According to CNET, drivers are not insured if the app they use to find passengers is turned off. If the app is on and they are waiting to connect with a passenger, they are covered under their personal insurance and additional “contingent liability coverage”. Once they have engaged in a transaction with a passenger, they are covered under additional commercial insurance.
Uber faced national criticism after an Uber driver in San Francisco hit and killed a 6-year-old girl. She was crossing the street at a crosswalk with her family when the car hit her. The company initially claimed that its insurance policy did not cover the accident since the driver did not have any passengers at the time, and later revised its policy to cover drivers the entire time they are working.
The girl’s family filed a wrongful death suit against Uber. According to the suit, the driver was distracted by the company’s smartphone app at the time of the pedestrian accident. The girl’s mother said in a statement that she blames the company for making its drivers look at smartphones while driving, which could violate texting while driving laws in certain states.
Due to the independent contractor classification, Uber is not responsible for paying for any of its drivers’ unemployment benefits, health insurance or workers’ compensation. This means that if a Uber driver is injured on the job, he or she must file a lawsuit against the party responsible if negligence played a role in the crash. Otherwise, Uber drivers may be on their own for covering lost wages and medical bills.
As the ride-sharing industry grows, new laws will address the evolving business landscape. Victims of accidents involving these vehicles – including Uber drivers, passengers, pedestrians, cyclists and other motorists – should consult with a personal injury attorney to learn more about what to do next. Each situation is different, and an attorney can explain how new laws might affect your case.