Guest Blogger, Annie Kernicky, Esq.
The growing popularity of rideshare services like Uber and Lyft is resulting in new and emerging liabilities. Just last week in Michigan, for example, an Uber driver, in between shooting six people, allegedly picked up passengers for Uber. Passengers flock to rideshares for their touch-and-go convenience and low cost, and courts and legislatures are trying to keep up.
Situations such as the Michigan shooting will not only spur an increase rise in litigation connected to rideshare services (see previous blog post), but are also prompting new laws across the county to ensure that minimum insurance and adequate coverage exist during, and even before, a passenger’s trip in a rideshare vehicle.
California, for example, recently enacted a new law designed to clarify what insurance coverage is required during the various phases that a rideshare driver goes through during a day of driving – i.e. Period 1, the time when the Uber app is on, but the driver hasn’t yet been matched to a driver; and Periods 2 and 3, which includes when the driver is matched with a rider, when the driver picks up the rider, and the entire drive until the rider is dropped off at the destination.
Like others of its kind across the country, the new California law sets insurance coverage requirements for all Transportation Network (TNCs) and driver partners while they are logged into the Uber platform and waiting for a trip request, i.e. Period 1. The law requires either the TNC, Uber’s affiliate Rasier-CA LLC, or the rideshare driver partner to maintain primary third-party liability insurance that provides coverage in the amounts of $50,000 per individual with a total of $100,000 per accident along with up to $30,000 for property damage during Period 1. Prior to the law, California’s minimum insurance requirement was $15,000. The new law also means that standard and optional coverages a driver may have purchased on their own personal auto policy no longer apply while the driver is logged into the app (in California only).
Outside of California, other states are enacting similar insurance-related laws, especially during Period 1 when other insurance may not be applicable because a passenger has not yet been picked up. At the beginning of February, in Florida, the Senate Judiciary Committee voted in favor of the law, which would set minimum insurance coverage requirements for when drivers are using their personal vehicles and are logged into the companies’ apps, but not in the act of transporting a paying passenger. Among others, the Florida bill would require a TNC driver or company to maintain primary automobile insurance issued by specified insurers with certain coverages in specified amounts during the different periods, and also require a TNC driver to carry proof of insurance coverage at all times during the use of a personal vehicle for rideshare services.
Certainly the trend is to require rideshare drivers (or companies) to have higher insurance minimums when a driver has the company app on, even with no passengers in the vehicle. These measures not only help protect public safety, but also ensure that there is adequate coverage and responsibility if an accident or potential liability does occur while a driver is using a rideshare app.