Ridesharing services such as Uber, Lyft and Sidecar offer on-demand shared rides. Passengers needing a ride to and from a location can summon a car and pay using a smartphone app. A driver picks you up from your current location and transports you to your desired destination. Rideshare is usually cheaper than hailing a cab or renting a limousine service, and easier and more flexible.
These services are changing the way we get around: You receive a text when your ride has arrived- convenient during inclement weather. You can grab a drink with coworkers and have someone else behind the wheel. You can work on your tablet or use the phone during your commute.
Ridesharing offers plenty in the way of convenience but is not without its controversy. What happens when an Uber or Lyft driver is in a car accident? Drivers and vehicles of traditional taxi companies are licensed and regulated by the state. Public hire insurance is for cab drivers- use a signal for availability and pickup riders. The taxi company is generally responsible for insurance on the vehicle. Uber has insurance policies in place to cover a ridesharing passenger. According to the Uber website,
“This policy provides up to $1 million in coverage for each and every incident that occurs from the time a driver has accepted a trip and is en route to pick up passengers or is transporting passengers to their destination…Uber Technologies, Inc. Liability coverage is up to $1 million per incident for bodily injury or property damage to passengers or any other third parties, such as pedestrians, other vehicles, buildings, etc. The policy also covers bodily injury caused by uninsured and underinsured motorists up to $1 million/incident, so that no matter who is at fault, coverage is in place.”
On July 1, 2015, California passed a law requiring that ridesharing companies provide liability insurance coverage for their drivers during all three periods the Transportation Network Company (TNC)-Uber, Lyft, etc.,- application is on. The California Department of Insurance states the TNC services generally fall into three periods:
The ridesharing company is required to maintain $1 million in liability during periods two and three. However, during period one, liability coverage decreases.
If you are an injured passenger or pedestrian of a rideshare driver, contact Kershaw, Cook & Talley to speak with an experienced personal injury attorney.
On September 1, U.S. District Judge Edward Chen in San Francisco granted Uber drivers class action status in a lawsuit to determine the drivers’ classification as independent contractors or employees. There are many factors, including behavioral, financial, and type of relationship, that can determine whether a worker is considered an independent contractor or employee.
Three drivers are suing Uber, claiming they are employees and entitled to reimbursement for expenses — which include gas and car maintenance. The drivers currently pay those costs out of pocket.
Under the ruling, Judge Chen stated that drivers can sue as a group. This means the lawsuit may cover over 160,000 California drivers, which could provide plaintiffs with additional leverage to negotiate a settlement rather than going to trial.
According to Reuters Legal, “The results of Uber’s legal battle could reshape the sharing economy, as companies say the contractor model allows for flexibility that many see as important to their success. An ultimate finding that drivers are employees could raise Uber’s costs beyond the lawsuits’ scope and force it to pay Social Security, workers’ compensation, and unemployment insurance.”
In June 2015, a California labor commissioner ruled that an Uber driver was an employee, not a contractor. Uber appealed this decision.
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