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Hidden Ways Uber and Lyft Are Skirting Accident Liability

Over the past few years, ride-sharing companies like Uber and Lyft have become juggernauts in the transportation industry, attracting hundreds of thousands of drivers, generating huge profits in a short span and directly competing with taxi companies. As more and more people are using their smartphones to complete transactions, app-based businesses like Uber and Lyft have a definite technological advantage. 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.

You may wonder if passengers are covered by Uber or Lyft insurance. Who is liable if the driver of one of these cars hits another car or pedestrian? Also, 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 South Carolina, 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

In different states around the country, passengers have been injured in ridesharing vehicle accidents. There have been pedestrian fatalities that have resulted from ridesharing accidents as well. These tragic stories received extensive media coverage and attracted national attention, causing scrutiny of ride-sharing companies to intensify. The state of South Carolina temporarily banned Uber operations in January of 2015 as a result of accidents and in order to reevaluate the company’s insurance legislation. You can read about the Uber ban here. The ban has since been lifted.

In South Carolina, Governor Nikki Haley signed ridesharing insurance legislation requiring companies to cover drivers from the moment they turn on their app. Since then, 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. Companies that provide insurance for ride-sharing drivers include:

  • Metromile
  • Farmers Insurance
  • USAA
  • Geico

However, problems can still arise 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.

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. Call Joe and Martin Today

If you have been injured in an accident involving a ride-sharing company driver, contact Joe and Martin Law Firm at 843-892-1000, or by filling out our online form. We can help answer all of your questions and alleviate your concerns in a FREE case evaluation. We are fully prepared to help guide you through this complex legal ordeal.