Ride-sharing tech pioneers, Uber & Lyft, have revolutionized the way people get from place to place. With its headquarters located in Silicon Valley, Uber has deep roots in the Bay Area community. In contrast, Lyft was Uber’s Southern California rival. As the popularity of ride-sharing services started to grow, concern over liability for accidents that occurred while driving a ride-sharing customer also grew.
As a result, California took steps toward regulating the young ride-sharing industry. In 2013, the California Public Utilities Commission (CPUC) imposed regulations on what it called “transportation network companies.” The CPUC defined transportation network companies to mean any company “that uses an online-enabled platform to connect passengers with drivers using their personal, non-commercial vehicles.”
Under California law, transportation network companies are legally obligated to ensure the safety of their passengers by maintaining and enforcing certain policies for their drivers. Among the primary obligations of an Uber or Lyft driver is their duty to maintain a certain level of insurance coverage.
Insurance Issues for Uber and Lyft Drivers
Insurance coverage for Uber and Lyft drivers and their passengers was a big issue. Although Uber and Lyft drivers provide an identical service to that of taxi cabs, ride-sharing drivers are private individuals who happen to use their personal cars as taxi cabs. Uber and Lyft merely provided car owners the means to connect with individuals who needed a taxi ride using their mobile app technology.
Although Uber and Lyft drivers had personal auto insurance policies that covered them in the event of an accident, their insurance ceased to provide coverage as soon as the driver opened the Uber or Lyft driver app to find a fare.
But why would drivers lose coverage when they opened a ride-sharing app on their phones? Because a standard personal auto insurance policy excluded coverage for losses that occurred in connection with using or operating a motor vehicle to haul passengers in exchange for a fee.
Fast forward to today – Uber and Lyft provide high-limit insurance coverage to protect passengers in car accidents caused as a result of a ride-share driver’s negligence. Additionally, if an Uber or Lyft passenger is injured by an uninsured or underinsured motor vehicle, the ride-sharing company’s policy kicks in. These policies typically provide up to $1 million in liability and uninsured motorist coverage to ride-sharing passengers.
Liability of Ride-Sharing Companies
Are ridesharing companies themselves ever held liable for a passenger’s injuries? Under the theory of vicarious liability, an employer is liable for the negligent actions or their employees performed within the course and scope of their employment. However, ride-sharing companies would be quick to point out that the drivers are not employees, but rather independent contractors.
Also, the theory of liability known as negligent hiring could theoretically apply in certain situations. Negligent hiring refers to a situation where an employer or principal can be held liable for the negligence of its employees or agents if they knew they were unfit for the position. However, this standard is difficult to prove as it requires proof that Uber or Lyft had actual personal knowledge of the employee/agent’s unfitness.
Consult an Experienced Bay Area Car Accident Attorney
If you or a loved one sustained severe injuries in a car accident caused by another person’s negligence, you might be entitled to a legal remedy for your injuries. To figure out the full extent of your right to recover such a remedy, you should retain a skilled Bay Area car accident attorney for legal advice. At the Mitchell & Danoff Law Firm, our lead attorney, Tab Mitchell, has dedicated years of his practice to service the needs of injured drivers throughout the Bay Area. Our legal team, led by Attorney Mitchel, takes pride in providing quality legal representation to those injured in a negligent car accident.
To schedule a free initial consultation with Attorney Mitchell, call our office at (888) 483-8614 or contact us online today.