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Uber Part Two: "We are not a Transportation Company"

This is Part Two of a blog on ride share services in Georgia. Today’s part addresses insurance issues that arise when accidents occur with these services.

“WE ARE NOT A TRANSPORTATION COMPANY”

The above statement, strenuously advocated as the position by Uber, is elaborated upon with the following: “[we] facilitate communication between demand and supply of transportation.” Uber maintains it is a platform only, not an employer. While it is tempting to think that this is just semantics, it is a crucial distinction: if Uber and other ride share services can claim that they are merely platforms that facilitate communication rather than employers that hire employees, then Uber, Lyft, and other ride share companies avoid billions in labor costs and potential liability. Drivers for Uber and Lyft are are classified as independent contractors, providing their own vehicles, their own health insurance, and in Georgia at least, their own background checks. Drivers must also have personal automobile insurance policies that will kick in whenever the ride share policy coverage does not apply; i.e. whenever the driver is “not on the clock.”

IT’S COMPLICATED

Insurance is always complicated, but even more so when ride share companies are involved. Generally, coverage is divided into three periods. Period 1 is when a driver is not covered by Uber/Lyft’s comprehensive policy because the driver has not received a request for a ride yet and does not have a passenger. This period can subject a driver—and anyone harmed by the driver—to a potential gap in coverage. If a driver is “on the clock” (but does not have a request for a ride or a passenger at the time), then the commercial exclusion in many personal policies might prevent the personal policy from covering the accident. This gap in coverage has led to what is called ride share endorsement policies for drivers, which cover the period between when a driver’s personal policy applies and when the ride share company policy kicks in. The fact that a driver is available for rides (which is what triggers the commercial exclusion in the personal policy) allows for coverage by Uber/Lyft of $50,000 per individual and $100,000 per incident, and $25,000 for property damage, but not for the full million dollar coverage of the comprehensive policy (see below).

Period 2 of insurance coverage is when a driver has received a request for a ride and is en route to get the passenger. Although not a guarantee, most of the time the ride share policy will kick in and cover any accident that occurs during this time frame. Period 3 is when a driver has a passenger, and this period is fully covered by the ride share policy.

Uber and Lyft have nearly identical insurance coverage: $1 million liability; $1 million uninsured/underinsured motorist injury.

WHAT HAPPENS WHEN…

On Sunday, April 8, 2018, a deadly car crash occurred in Atlanta when an Uber driver had a “medical emergency,” crossed a lane of traffic, and hit a utility pole. One of two passengers died, and the other was hospitalized due to his injuries. In a case like this, the Uber driver was clearly working and with passengers, so the coverage was in Period 3, when the full $1 million dollar liability policy would apply.

But what if the Uber driver had hit a pedestrian? The analysis is not much different; the Uber driver was at fault, and was working at the time, so the full $1 million dollar policy kicks in and covers any injuries suffered by the pedestrian.

The key is remembering what was stated at the beginning: that Uber/Lyft are not transportation companies. Therefore, when in an accident with an Uber/Lyft car, very rarely is the company sued. (See Part One of this series for actions which can lead to lawsuits against ride share companies.) It is the driver who normally is sued, and the driver’s insurance, in addition to the insurance provided by Uber/Lyft for the driver, provides coverage.

Clear as mud? That’s why you need an experienced accident attorney!

If you are in an accident with an Uber/Lyft car:

1. Call 911;

2. Get the contact information of all witnesses to the accident;

3. Get the name of the ride share driver if you do not already have it;

4. Screen shot the Uber ride and receipt;

5. Hire an attorney

CONTACT YOUR ATTORNEY

If you or someone you know has been injured in an automobile accident, contact Dave Thomas at The Thomas Law Firm for a free evaluation of your case.

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