Ride Sharing Insurance Challenges

Posted by Bradley Thayer | Nov 01, 2015 | 0 Comments

Taxi? We live in interesting times and new ride sharing services are changing how we get around… and also bringing up new insurance questions.

“May you live in interesting times”, is said to have been an old Chinese curse.  At Schauermann Thayer, we are grateful for all the positive change in our modern age, but when it comes to the “sharing economy” and in particular ride sharing, we do indeed live in interesting times.  We're talking about services like Uber and Lyft.  Traditional taxi drivers may be feeling a bit cursed as their incomes get reduced.

Of course some local folks are finding the employment revenue a blessing as do people looking for rides that used to be scarce at times.  But we also wondered about insurance for the new ride-share service drivers since sooner or later these will come into play during typical personal injury cases.  Who will be blessed with the right insurance when the time comes?

I would expect insurance companies to be hesitant to insure ride sharing services that are deemed illegal in some states because they do not comply with existing municipal taxicab regulations.” — Law Professor, Janice C. Griffith

As far as the number of people using the new services — the figures have risen sharply in a short amount of time.  KATU.com has reported that “Uber and Lyft are now holding 60 percent of the market share while taxis hold just 40 percent, down from 70 percent in May. City leaders noted the ride-share services are meeting a new demand taxis could not keep up with.”

If you drive for one of the ride sharing outfits, do you have the right insurance?  The answer to this question gets a bit complicated.  First there appears to be a kind of gap between when you are covered by the insurance of the ride sharing company after you pick up a fare, and when you are covered by your personal auto insurance prior to picking someone up.  Many personal auto insurance consider you to be driving for business purposes when your Uber app is on, even if you do not have a paying fare in your car, and so may impose payment limitations since you are using your auto in a business activity.

Then there's the question of compliance and whether you are adhering to the relevant laws which are evolving quickly.  WalletHub, in an article on “Insurance Facts for Uber, Lyft & Sidecar Drivers”, quotes Janice C. Griffith, professor of law at Suffolk University Law School, observing, “I think the lack of a stable legal platform for ride sharing services creates uncertainty as to their future viability. I would expect insurance companies to be hesitant to insure ride sharing services that are deemed illegal in some states because they do not comply with existing municipal taxicab regulations.”

Above is a chart from “MetroMile” offering a new kind of insurance coverage for Uber drivers who may find themselves in between their personal insurance and commercial coverage by Uber.

We noted that a new kind of insurance has sprung up — so far available only for Uber drivers in Washington and Oregon.  It's called “MetroMile” and their website states that their insurance products are written by insurers in the National General Insurance Group.  They are seeking to provide affordable coverage for those problematic gap areas between traditional personal vehicle coverage and the commercial coverage Uber extends to its drivers (see chart above).

Our advice is to read the fine print carefully, stay up on all the latest relevant laws and regulations in your area, and always look to have extended insurance coverage for all situations and gap areas you may encounter.  Remember that your insurance may need to cover yourself, your passengers and those in other vehicles and even pedestrians upon occasion.

About the Author

Bradley Thayer

Brad Thayer is a partner at the Schauermann Thayer firm. Brad is licensed in both Oregon and Washington. He has been practicing law since 2015. He was presented the 2018 Rising Star Award by the Clark County Bar Association. Brad's practice focuses on automobile collision, motorcycle, bicycle, pedestrian injury, dog bite, and myriad other types of injury and insurance cases. During his free time, Brad enjoys following the Portland Trail Blazers, playing basketball, going to concerts, and playing the drums. He especially enjoys hiking in the Columbia River Gorge and exploring other Northwest wonders.


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