RIDESHARE LIABILTY IN THE WORLD OF UBER & LYFT
Ridesharing services like Uber and Lyft have grown in popularity across the country in recent years, and with this increase in the use of these kinds of rideshare serives, so too has grown the number of lawsuits arising from motor vehicle accidents occurring during a rideshare situation. This phenomenon has brought to the attention of the legal community a wave of consumers’ questions regarding liability when an accident occurs. These types of accidents can be complicated, and, depending on the factual circumstances, liability can drastically change. Additionally, ridesharing drivers are not generally considered employees of the company they are driving for; with companies like Uber and Lyft claiming no legal responsibility for their drivers. However, in light of recent litigation, drivers’ status as independent contractors versus employees may still not be a settled issue.
Nonetheless, most major ridesharing companies still perform driver safety education, driver background checks, and motor vehicle checks. Similar to commercial carrier insurance, which is required for taxi services, both Uber and Lyft offer up to $1 million in liability insurance coverage, but generally the policy has some limitations as to when it applies and whom it covers.
Consider the following information provided by Uber’s website, which outlines three different factual scenarios effecting coverage:
APP ON - While waiting for a request
While you’re online with Uber and before you accept a request, you are covered for your liability to a third party if you are in an accident when you’re at fault. A third party is someone other than yourself. Coverage includes your liability to pay another person’s medical bills or to pay for property damage (like a damaged fence).
Coverage Limits vary by state, but are at least:
$50,000 per person/$100,000 per accident for bodily injury
$25,000 per accident for property damage
If you are not at fault, you may make a claim against their insurance. Your personal insurance policy may also cover you in this situation. Please check your personal coverage for more information.
REQUEST ACCEPTED AND ON TRIP - On your way to pick up a rider and during a trip
While you drive to pick up a rider after accepting a request and during an Uber trip, you are covered for three things:
Third party liability coverage
This insurance covers your liability for damages to any third party such as another driver, pedestrian, or property in case of an accident when you’re at fault. Coverage limits vary by state, but are at least $1,000,000 per accident.
Uninsured or underinsured motorist bodily injury coverage
This insurance covers you and anyone else in your vehicle in case of an accident where another driver is at fault, but does not have sufficient insurance. This also covers hit and run accidents where the at-fault driver cannot be identified. Coverage limits vary by state, but are at least $1,000,000 per accident.
Contingent collision and comprehensive coverage
This insurance covers your vehicle in case of an accident whether it was your fault or not, as long as you maintain auto insurance that includes collision coverage for that vehicle while not on an Uber trip. Coverage limit is up to the actual cash value of your vehicle. There is a $1,000 deductible.
OFFLINE - When driving your car for personal use
Since you are not driving on the Uber platform during this period, you are not covered by the insurance Uber maintains for driver-partners. Any accidents that occur in your car while not driving on the Uber platform are covered by the personal auto insurance coverage that you purchase on your own.
Similar to Uber, Lyft’s coverage of their drivers changes depending on the factual circumstances of the rideshare situation. Consider the following infographic provided on Lyft’s website:
Regardless of the driver’s fault in the accident, some claims may be fought by the rideshare company’s insurance company. Likewise, insurance claims can be made against the driver’s personal auto insurance, which may not cover someone as long as they are using their personal vehicle for commercial purposes. Essentially, Uber and Lyft are asking their drivers to do just that: use their personal car for business. An insurance company may cancel a policy if they found out a personal vehicle was being used for commercial ridesharing when an accident occurred.
But what happens to passengers who are involved in an accident with a ridesharing vehicle? Are they entitled to compensation for their injuries? If you are riding in a covered vehicle, or you are hit by a ridesharing vehicle that was in service at that time, you should be covered by the company’s policy. If however, you are hurt in a collision with a car which is off the clock, that driver’s insurance company should be responsible, but quite often denies initial claims.
If you were hit by a reckless driver who was in service during that time, things will get more complicated. When the driver went into service, the rideshare's insurance kicked in, but the company can deny claims might come up because of the driver’s recklessness. Additionally, when the driver accepted a ride, additionally coverage provisions came into effect. As mentioned above, generally, the driver is considered to be an independent contractor, and thus, it can fall to the driver’s personal auto insurance to pay for the claim if he/she hurts a passenger or hits a pedestrian as a result of reckless driving. Most personal insurance policies exclude coverage if the driver was acting for profit at the time of the accident.
Sorting out liability and which insurance company or individual is responsible for covering your claims can be a lengthy and complicated process. Companies have teams of lawyers hired to ensure the company pays out as little as possible. If you ever find yourself in such a situation, it is strongly encouraged to hire your own lawyer. This will ensure you receive just compensation for your injuries and future expenses related to them. The Law Offices of Drinkwater & Goldstein, LLP are more than happy to help you and are experienced with motor vehicle accidents involving rideshare situations.
Keep in mind that if you find yourself in an accident involving a taxi, rather than a rideshare vehicle, you should be aware that the driver always has commercial carrier insurance, in addition to the corporate policies that limit the taxi company’s liability. Although corporate insurance carriers also tend to deny claims, sorting out the damages in these cases is much simpler and takes less time. Regardless, whether you are a passenger injured while riding in an Uber, a Lyft, or in a taxi; you are a pedestrian or cyclist who was hit by an Uber, a Lyft, or a taxi; or you were a driver who was crashed into by an Uber, a Lyft, or a taxi, we strongly encourage you to give Drinkwater & Goldstein, LLP a call today at (856) 753-5131 to discuss the facts of your case. There is absolutely no charge to you unless we recover on your behalf. Visit us online at drinkwatergoldsteinlaw.com or at helpimhurt.law. Finally, be sure to subscribe to our YouTube Channel by searching “Drinkwater & Goldstein” to stay up-to-date with our New Jersey Personal Injury Law Video Blog.