Recently, the private taxi service Uber has been taking the U.S. transportation world by storm with its personal service and competitive fare pricing. Many people are opting to utilize the app-based ride service over traditional cabs or public transportation. But one thing you should consider before hopping into your next Uber ride, or signing up to become an Uber driver, is how your state regulates these drivers and their insurance.
Cab services and public transportation services have special licenses and insurance that covers drivers and passengers, but what about Uber drivers?
According to the company’s blog, Uber provides $1 million of driver liability coverage when drivers “operate under the Ridesharing or Transportation Network Co. model through Uber’s TNC subsidiaries, Rasier LLC and its affiliates.” The insurance applies from the time of pick-up to drop-off, the company’s states.
However, there seems to be a gray area in coverage when it comes to the type of insurance the drivers themselves are required to carry, and how the drivers are covered between jobs. According to Uber, the only personal insurance that drivers are required to have is liability coverage. The company recommends that drivers obtain separate health and collision insurance, but doesn’t require it.
In addition, Uber drivers are independently contracted employees, which usually means they aren’t entitled to workers’ compensation.
Colorado Filling in the Gap
How Uber operates in each state is left up to local lawmakers to determine. One issue that Colorado legislators have addressed is the problematic “insurance gap.” Standard personal insurance coverage for an Uber driver (if they have it) is stopped as soon as the driver turns on their ride-sharing app. However, Uber’s business liability insurance doesn’t kick in until a driver picks up a passenger. This leaves a gap period when a driver is uninsured or underinsured.
The Denver Post recently reported: “SB 125, which became law in June and authorized ridesharing services in Colorado, gave drivers until Jan. 15 (2015) to get this gap insurance.”
Several insurers, such as USAA and Farmers Insurance, are now offering extended Rideshare coverage to drivers.
Because of the differences in states’ regulation of companies like Lyft and Uber, determining your legal rights to compensation when involved in an accident with a Rideshare or taxi driver can be confusing.
If you need guidance and don’t know where to begin, we can help. Please contact the car accident attorneys at the Babcock Law Firm today to schedule a free consultation.