Ridesharing – Who’s Liable When There’s An Accident?

The two primary ridesharing services in America are Lyft and Uber. These services have exploded over the last couple of years. They are popular, providing customers a less expensive and often, more comfortable ride. The services are convenient, reasonably priced, and can be easily arranged using mobile apps. With the increasing popularity of these services, accidents are inevitable. When an accident happens, who is liable? Ridesharing accidents can be very complicated. The drivers are not considered employees of the company and the companies will typically claim they are not responsible for the actions of their drivers.

Even so, the major ridesharing companies conduct driver background checks, driver safety education, and motor vehicle checks. The companies are required to provide commercial carrier insurance and both Uber and Lyft have liability insurance for one million dollars. This policy has many limitations in its coverage.

Since ridesharing drivers are using their personal vehicle, the first claims are often against the driver’s personal auto insurance. As the ridesharing business grows and more cases come to court, employers are being held liable for ridesharing accidents. This is because it is the company’s responsibility to connect riders with safe drivers.

The company is actually collecting a safe ride fee that is supposed to be used to perform driver safety education and motor vehicle screening. Still, the ridesharing companies attempt to refuse liability because the drivers are technically not employees of the company.

The companies do require their drivers to carry liability insurance. The amount of coverage depends on the state where the rideshare driver is working. The rideshare company’s liability policy is considered an umbrella policy which kicks in after the driver’s liability insurance has paid. This coverage begins when the begins a trip and ends when the passenger leaves the vehicle.

The exact time when the company liability insurance kicks in is a bit murky. With Uber, their liability insurance does not begin until the driver is logged into the mobile app. If the driver is logged in and available to carry passengers, but is not transporting anyone, the driver’s personal auto insurance provides first coverage and then Uber’s liability insurance covers another $50,000 per injury and $25,000 in property damage.

If you are involved in a ridesharing accident, it is important to call local law enforcement and report the accident. This is critical to starting an official investigation into the accident and this official report is key to dealing with the liability issues.

If you are injured as a result of reckless driving, but not a passenger, the situation is even more complicated. The ridesharing company may refuse to pay since the driver is considered an independent contractor. Many personal auto insurance policies prohibit using a personal vehicle as a business which can make them reluctant to pay as well.

It is also important to obtain medical care for any possible injuries that occurred as a result of the accident. If you are injured, seek advice from an attorney who specializes in the ridesharing laws in your state.