Liability Issues for Uber and Lyft Drivers

Lyft and Uber are steering very clear of Portland

Some problems in the Road Share industry are yet unresolved. Image: lawlorwinston.com

(SALEM, Ore.) - Peer-to-peer, or ridesharing, is nothing new; just check any grocery store in the low-income parts of town and you’ll find “bootleg” taxis offering people rides home at a fraction of the cost of a traditional taxi.

In Salem, we have companies like The Cherriots, Ridester and other organizations that help people pair up for carpooling needs.

What makes services like Lyft and Uber different is that they have cornered the mobile app market, making it possible for someone in any part of town to call for a ride with the push of a button.

They have also refined the payment process so that all trips and tips are charged to the passenger’s credit card – no money ever changes hands.

In areas where you can’t just walk outside and hail a taxi, ride sharing services have been a godsend; not just for the passengers, but for the drivers as well. In a world where unemployment is still over five percent, ride sharing gives people the opportunity to make a living off of their automobiles.

Ride sharing isn't all pie and roses, however.

Opponents of the services (and Oregon isn't the only state to have residents and officials voicing their concerns. Texan officials have been very skeptical of these services too) have valid concerns about safety, especially amid reports of assaults on passengers.

Additionally, many ride sharing drivers don’t have commercial licenses, which require different training than a standard driver’s license. There are also concerns about financial ability in the event of an automobile accident.

Car Ownership

Peer-to-peer drivers own, or lease, their own vehicles. This means that the vehicles are registered to the drivers and not to Uber or Lyft.

This also means that the drivers are completely responsible for the maintenance, repair, and upkeep of their vehicles, including safety systems like brakes, but they don’t necessarily have to show those maintenance logs to the ride share companies.

This means a driver could defer maintenance, or delay a repair, and neither the passenger nor the ride share company would know.

Insurance Responsibility

Because the drivers own their cars, and are solely responsible for insuring their vehicles, they are required to have insurance if they want to drive for a peer-to-peer car service.

The firm of Reyes, Browne, and Reilly, each a Dallas car accident lawyer, writes that in Texas it’s already hard enough to get insurance companies to pay out after accidents. When you add the uncertainty of ride sharing, it becomes even more difficult.

Where the problems start is in what type of insurance coverage they have, and what type of restrictions there are. Most individual car insurance policies have restrictions against using the car as a taxi.

So, if an Uber or Lyft driver gets into an accident while carrying passengers, not only will the insurance company not pay for the accident, it might also void the policy completely.

Many drivers don’t think to check with their insurance companies before signing up with a ride-sharing company, and don’t find this out until after they have had an accident and made a claim.

Some peer-to-peer car services do offer supplemental insurance to their drivers, and that might cover an accident, but then there are also questions of whether or not that insurance will provide coverage if the driver is not carrying passengers at the time of the accident, such as when they are cruising around waiting for fares, or on their way to pick one up.

This supplemental insurance also might not cover the driver at all, regardless of whether or not he is carrying passengers. Although a new bill was signed into law in California, there is no such legislation in other areas of the country.

Company Liability

Although passengers use apps designed by the ride share companies, and the drivers act as representatives of the companies, the drivers aren't actually employed by the companies; they are independent contractors.

If you look at the terms and conditions for these companies, they make it clear that they hold no responsibility for damage caused by the apps, or the drivers.

Unlike a traditional cab company, or other transportation company, that bears at least some responsibility, ride share companies make a point of distancing themselves from their drivers.

Personal Responsibility

One of the biggest issues that have been raised has been that of personal responsibility on the side of the drivers. There have been numerous reports of individuals posing as Lyft and Uber drivers and then attacking and/or robbing the people they transport.

This is one of the reasons that, for example, Houston has required Lyft and Uber drivers to submit to background checks, drug tests etc. These requirements have caused Lyft to pull their service from Houston and its surrounding suburbs.

These and other fees are also why Lyft and Uber are steering very clear of Portland and why, though they've been advertising for drivers here in Salem, availability of rides through these programs is slight at best.

Also because ride sharing on this scale is relatively new, there just aren't legal precedents in place for handling situations where a driver injures himself or someone else in an accident.

This is not to say that it’s impossible to hold these companies liable in the event of an automobile accident, only that they have set things up to make it very difficult.