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The Sharing Economy Part One: Are those cars with pink mustaches safe?

One part of the economy that is definitely growing is commonly referred to as the "sharing economy." One example of the sharing economy is where private drivers use their private cars to drive people from point A to point B by using an app on their phones. The first company to develop such an app was Uber Technologies, Inc., founded in 2009. Drivers work when they are logged into the app, and receive requests from passengers via the app. Since Uber does not own the cars or employ the drivers--they only own the technology--they are not subject to the rules and regulations that apply to traditional transport services and vehicles.

At least that is what Uber and other companies like it argue when taxicab services claim they are being crowded out of the market. Western Washington Taxicab Operators Association filed a lawsuit against Uber Technologies, Inc. asserting unlawful business practices. One of the main issues is the fact that private drivers are not required to carry commercial insurance like taxicabs and traditional transport services must. In response to increasing concern regarding liability, the Seattle City Council voted to legalize and regulate the private driving industry.

In addition to the issue of commercial insurance, personal safety has become a concern with the use of private drivers. In 2013, a 20 year old woman accused a driver for Uber of rape. Also in 2013, a San Francisco man accused an Uber driver of physical and verbal abuse. As recently as March of 2014, a Chicago woman filed a lawsuit against Uber Technologies, Inc., claiming that a driver sexually harassed and groped her. Critics of the Uber app point to the fact that by not being subject to the regulations that apply to taxicabs, private drivers are not run through criminal background checks, drug testing, finger printing, sex trafficking awareness courses or defensive driving training.

One of Uber's rivals, Lyft, whose drivers' cars are recognizable by the large pink mustaches displayed on the front grill of cars--addresses the safety issue upfront. Lyft voluntarily requires its drivers to submit to a national, county and sex offender background check, a driving record check, phone screening, a personal meeting, and vehicle inspection. Drivers must be 23 years or older, and vehicles must be model year 2000 or newer. Lyft does not, however, require commercial insurance.

Personal safety and accident liability are important considerations with any transport service. In innovative industries, the technology often gets ahead of the law. It appears that in the emerging sharing economy, putting drivers directly together with riders--called peer-to-peer transactions--has indeed gotten ahead of the laws and regulations that may need to apply in order to keep riders and others on the road safe.

If you or someone you know has been injured using one of these services, or for more information about the safety and liability issues surrounding using a private driving service such as Uber or Lyft, contact the Thomas Law Firm today.

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