How are you planning on getting around town on Wednesday evening? Unless you’re staying home, chances are you won’t want to drive, but will instead take a cab or rideshare/TNC (the author of this post definitely will.) But do you know the differences between a traditional taxi and services like Uber, Lyft, and Sidecar?
In many ways, the services are similar – a driver with a car will come to pick you up and drop you off where you need to go. But the services have many differences, including insurance coverage. (Perhaps not the most glamorous difference, but definitely a vital one.)
As AAJ explains:
There are three forms of insurance that come into play when consumers use services like Uber, Lyft, and Sidecar: 1) the driver’s personal auto insurance; 2) the company’s commercial auto insurance; and 3) most recently, in the case of Uber, the addition of contingent liability insurance.
The driver’s personal auto insurance applies when the driver is using his/her vehicle on his/her own time or when he/she is logged onto the app and available for service. When the driver is logged onto the app, but has not yet accepted a trip request, the company’s contingent liability coverage also applies. This coverage was recently added by Uber to cover the gap when a driver is in between company facilitated trips.
Seth Price wrote in a piece for justice.org, “Some ridesharing drivers innocently, yet erroneously, believe that their personal automobile insurance will cover them in the event of an accident. However, when acting as an independent contractor for a TNC, these drivers are not considered to be private drivers by their personal insurance carriers. This usually leaves drivers in limbo, with neither personal insurance nor commercial insurance providing crucial coverage.” Many cities and states are taking action to ensure that drivers and passengers are fully covered in case of a collision.
If you are going to be getting around town on Wednesday – or any other day of the year – you should know the insurance policies of your drivers and their services.