Your car breaks down. You call a tow truck and a ridesharing service. The car pulls up and you get in. The driver seems a bit disheveled but you brush it off because you are in a hurry to get to a meeting. After you’re on your way, the smell of alcohol is unmistakable and suspecting the driver is drunk, you tell him to pull over. Before he can do so, he rear-ends the car in front of you, opens the door, and takes off running. Now, you’ve got a gash above your eye and you’re stranded. To make matters worse, when you get out of the car to call the police, someone steals your laptop from the backseat.
Your plane just landed in Newark and you open your ridesharing app to arrange for a ride. A few minutes later, the driver texts you that he has arrived. You have his photo, license plate number, and description of the car and you spot him as soon as you step outside. All is well. You get into the car and suddenly a van rear-ends the ridesharing car. You’re injured. Now what? Who will pay your medical bills?
New Jersey legislators recently addressed that question. Under the newly enacted Transportation Network Company Safety and Regulatory Act, drivers and the ridesharing companies that employ them must meet certain insurance coverage standards.
The new law provides for $1.5 million in coverage under certain conditions as explained below.
In 2009, the San Francisco based ride sharing app, “Uber,” was founded. When the app was launched in 2010, it changed metropolitan travel. As of December 16, 2014, Uber was available in 53 countries and more than 200 cities worldwide. For anyone unfamiliar with Uber, it is a mobile app that allows users to submit a trip request which is sent to crowd-sourced taxi drivers. Without a doubt, the rise of Uber marks an exciting alternative to the traditional yellow cab when it comes to getting from Point A to Point B in most major U.S. cities. However, along with the many benefits to Uber come both real and potential problems for Uber customers and the public.
First, Uber has come under fire because of safety concerns associated with the manner in which Uber drivers are notified of fares. When a customer submits a ride request from their mobile phone, Uber routes that request to drivers on the street. The Uber driver then receives a message on their mobile phone, alerting them of the fare. The driver then has 15 seconds in which to respond to accept the ride request. Drivers may be temporarily suspended from Uber for ignoring these ride requests on their cell phones. The obvious safety concern involves the distraction caused to the Uber driver by the company’s cell phone notification system, which presents a financial incentive to drivers to respond to cell phone requests while driving.
On New Year’s Eve in 2013, a six-year-old girl, Sophia Liu, and her mother were struck by an Uber driver in San Francisco. Tragically, the young girl was killed. The family filed suit against Uber asserting that Uber is responsible for the crash because its app is distracting to drivers and leads to inattention while driving. Specifically, the suit alleges that Uber drivers “must respond quickly to a user request for service by physically interfacing with the app, thereby leading to distraction.”
You don’t need an expert to tell you that distracted driving is unsafe. It is a major cause of car wrecks in the United States. One of the questions that has arisen alongside crashes involving Uber drivers is whether Uber will take financial responsibility for the negligence of its drivers and provide compensation for injured victims of distracted driving.
There is currently concern that innocent people who are injured in car crashes caused by Uber drivers may be denied compensation when both the driver’s private insurance company and Uber’s insurance carrier deny or disclaim coverage. The problem is that Uber does not operate like a traditional taxi cab company, which would be required to carry commercial auto insurance for its fleet of cabs. Uber often hires private car owners to transport Uber customers. These drivers may or may not have their own private auto insurance policies. The risks associated with taking a ride from an uninsured driver are obvious. However, even Uber drivers who have private auto insurance may not actually have insurance coverage for their customers because most private auto insurance policies contain exclusions for commercial use of the vehicle.
When that happens, the injured customer looks to Uber for coverage under its $1 million insurance policy. Unfortunately, Uber’s insurance policy may be deemed “excess” coverage, which is only triggered once the Uber driver’s private insurance policy is exhausted. Currently, there is dispute over whether an “excess” policy, such as Uber’s, would provide any coverage for an uninsured Uber driver or for an insured Uber driver whose private policy excludes coverage for commercial use of the vehicle. This issue will surely be tested in courts across the country in the months and years to come, as it appears Uber isn’t going anywhere anytime soon.
The point to take away is that with all of the pros associated with Uber and other similar ride-share apps (e.g., Haxi, Lyft and Sidecar), there are some very real and other potential risks you should be aware of before hopping into the car. Your safety is nothing to gamble with, so ask your Uber driver if his Uber app is open on his cell phone. If it is, ask him if would mind not checking it while he is driving you to your destination. Asking for safety and peace of mind is not an unreasonable request. Also, you may want to ask if the driver has commercial liability insurance. If the answer is no, at least you will be able to make an educated decision. Do you want to take the ride and accept the risk that you would not be compensated for any injuries you sustain if there is a crash? Or would you rather not risk it and hail a good, old fashioned yellow cab instead? No matter what you choose, now you’re better prepared to do what you have to do to stay safe out there.