Ride-shares are the transportation trend that has been giving a back seat to taxis. Instead of calling for cabs, people are using apps to send out a signal to anyone who wants to pick them up. The driver is paid with the rider's credit card, entirely online. There is no need to exchange money, and the service usually results in shorter wait times.
While the number of cities buckling under the pressure to introduce ride-share programs, problems are beginning to surface for ride-share drivers.
What's the Problem?
When a driver signs up for a ride-share company like Lyft or UberX, they agree to use their car to make money as a shuttle. Most auto insurance companies have provisions at definite odds with driving customers. For instance, many companies prohibit coverage while moving people for money. Even if a client was able to prove in court that he was looking at his phone for a new customer but did not currently have a customer, some insurance companies may still deny claims.
Policyholders should also be aware that even if a contract does not expressly prohibit shuttling passengers for a fee, they may still have a claim denied. The auto insurance provider can easily claim that only incidents stated within the contract will receive coverage.
Contract provisions in your insurance policy should talk about coverage when driving for a transportation network company (TNCs). TNCs and ride-share companies will often take out policies on their drivers with full auto and liability policies. These may or may not protect the driver. Auto accident attorneys have pointed out that, without addressing the new industry springing up in cities all over the country, third-parties (from passengers inside the car to those injured outside) involved in an accident may not be covered.
The problem is that until the Internet age, companies have traditionally separated everything as private or personal. Depending on its zoning, a house cannot be a store, for instance. Insurance companies have failed to integrate the new social norms. Providers still look at vehicles as either a device to take you to and from work, or a device that is used only for work.
Ride-Share Companies Respond
Sidecar, Lyft, and Uber announced that they offer $1 million in liability coverage for their drivers. This insurance, as a second policy, could stand to augment the driver's insurance in the case of an accident. Their coverage is meant to be a kind of safety net. If a driver gets into an accident and his insurance falls through, the company can swoop in to save the day.
Experts in auto insurance point out that while that sounds great to their drivers and customers, ride-share programs are still extremely new. There are gaps in the laws and in drivers' policies. They are waiting for that inevitable case, the one that exemplifies all the laws currently in contention, to step in and define the future of ride-share insurance and exactly who is covered by what.
Until that day arrives, customers should contact their providers to see if they are covered before driving for (or using) a ride-share service.