It is no secret that ride-sharing apps such as Uber and Lyft are revolutionizing the taxi industry. Whether it be full time taxi drivers quitting their jobs or college students and stay-at-home moms working in their spare time, many people all over the nation are taking up flexible shifts with these apps. However, are these jobs really all they’re cracked up to be?
One huge factor which most drivers probably don’t consider is the liability of driving around others. These ride-sharing companies as well as federal legislators examine periods of liability in three different terms: offline- when the driver’s app is not on, online (not on trip)- when the driver is waiting for a customer but has not yet picked them up, and on trip- when the customer is actually in their car. For the first period, offline, the driver’s personal auto insurance policy would cover any loss, as expected. During the “on trip” period, Uber’s liability policy will cover the passengers in the case that they are injured in an accident or if the driver cause damages or injury to another vehicle. There may also be some coverage for the driver and their vehicle, but with a high deductible. The biggest area of concern is during the online (not on trip) period, Uber’s insurance policy only provides bodily injury and property damage coverage for others, not for the driver or for their vehicle.
So, what does this mean? Basically, it means that there are still a lot of uncovered periods in which the driver could suffer a major loss and have no insurance coverage. This is especially true considering most insurance companies and state legislatures have ruled that if a driver is found to be using a ride-sharing app of any sort, their personal auto policy provides no coverage.
In order to protect themselves, Uber and Lyft drivers should be buying a new, special insurance policy that explicitly allows for such commercial driving. This may either be in the form of an all new commercial policy or could be purchased as an endorsement on their current personal auto policy. If you are interested in such a policy or have further questions on the topic, please feel free to reach out to us!