Your days of hailing a yellow taxi by sticking your thumb up might be numbered. In the US, the use of rideshare services is growing daily.
Like any mode of transportation, rideshares aren’t perfect. But while rideshares have received plenty of negative publicity, there’s an issue that hasn’t gotten much media attention:
What happens when there’s a crash involving a rideshare vehicle?
The answer is more complicated than you might think. Let’s take a look.
Rideshare companies (sometimes called transportation network companies, peer-to-peer ridesharing, or ride-hailing companies) provide driver-for-hire services to consumers through the use of freelance drivers who use their personal vehicles to transport customers.
Rideshare services operate through a smartphone app. For example, if you want a ride from your apartment in Queens to the Brooklyn Museum, you only need to open up the app, request a ride, and wait for your driver to arrive. Once your driver drops you off at your destination, the credit card you stored on the app will automatically be charged.
Rideshare services offer convenience and often cost less than using a traditional taxi or driving your own vehicle. Still, there are concerns about how the services operate, including how well they screen their drivers.
What’s more, there have been a number of instances where passengers have been assaulted and even murdered after getting into a vehicle that they believed to be a rideshare vehicle, but that turned out to be a person posing as a rideshare driver.
There is also some evidence that rideshare services are making the roads even more dangerous.
In the years before Uber and Lyft were launched, fatal car accidents were at record lows. However, the arrival of ridesharing is associated with an increase of 2-3% in the number of fatal accidents, according to researchers John Barrios of the University of Chicago.
Whether you’re a passenger in a rideshare vehicle or the driver of a vehicle that collides with a rideshare vehicle, liability will generally depend on who’s at fault for the accident.
To prove that someone was at fault (i.e. negligent) for a car accident, you must prove 3 elements:
Determining fault in a rideshare accident case is just like determining fault in a regular car crash. What makes rideshare accidents a little different is the role insurance plays when the injured party seeks reimbursement from the at-fault party.
Most drivers are covered by their personal auto insurance policy. This means that when you’re involved in a car accident, you can make a claim with the at-fault driver’s insurance policy and be reimbursed for your medical expenses and other damages.
However, personal auto insurance policies contain a business-use exclusion, which means that coverage doesn’t apply when the driver is using their vehicle for business purposes. This means that as soon as a rideshare driver picks up a customer, the rideshare driver has no liability insurance and also no collision insurance under their personal auto insurance policy.
So how do you get reimbursed if the rideshare driver is responsible for your injuries?
Both Uber and Lyft provide $1 million in liability coverage for their drivers. This sounds impressive, but the amount of coverage provided depends on which “period” the driver is in:
Rideshare services — and the laws that govern them — are constantly evolving. For example, California recently implemented its own specific insurance requirements for rideshare drivers.
If you’re involved in a car accident with a rideshare driver, use our free online directory to connect with an attorney so that you can discuss your legal options.