How Uber and Lyft protect their drivers, passengers, and others — and what to do if they don’t
Ridesharing.
It sounds like a trendy buzzword to some, but it’s becoming a significant part of the mainstream transportation network. A rideshare is when a passenger travels in a driver’s personal vehicle for a one-time ride that’s purchased through an app. The most widely-known rideshare companies are Uber and Lyft.
Many people use rideshares for convenient rides to and from airports, or other situations when they might not have a car available. There are also plenty of times when people will summon a rideshare because they’re not able to drive safely (for example, if they’ve been drinking), which is always the responsible option, rather than driving under the influence of drugs or alcohol.
California was the first state to legalize transportation network companies (TNCs) and is where some of the major rideshare providers originated.
Rideshare companies require background checks on drivers, but the drivers aren’t required to have a taxi driver's license.
Most of the time, a taxi is owned, inspected, and maintained by a taxi company and leased by a driver. A city or county usually has strict regulations on taxis and drivers, and a taxi driver is required to have a specific type of driver’s license.
In most big cities, you can simply stand on a sidewalk and hail a taxi. Or, when you exit an airport or train station you’ll be greeted by a line of taxis waiting for their next fare. You can grab one, tell the driver where you’d like to go, and pay with cash or credit card when you arrive.
A rideshare operates a little differently.
For starters, there usually won’t be a line of Uber or Lyft cars waiting on the street. Instead, if you know you need a ride, you can use the app to “call” a vehicle based on the number of passengers, destination, and other specifics (for example, you can request an Uber with child safety seats if you need them).
Also, your credit card is on file with the app, so payment operates through the app without having to exchange money in the car.
Some people feel that the rideshare experience is more “personal” than a taxi because you’re riding in someone’s personal vehicle — like getting a ride with a friend. When you reach your destination, the app will prompt both the passenger and the driver to leave a rating that lets others know about the quality of the experience.
A ride in an Uber or Lyft vehicle carries the same risks as you’d have in any other car, which means they have accidents, too. Most rideshare company will not keep drivers who routinely get into accidents or engage in unsafe behavior, but even safe and cautious drivers have accidents sometimes.
Let’s take a look at what to do if you’re in a car accident involving a rideshare vehicle, whether you’re a passenger, a driver, or the driver of the other car.
Types of rideshare car accidents
First, you should know that there are 4 main categories of personal injury claims in the involving rideshare vehicles:
- Passenger was injured in a ridesharing vehicle during a ride
- Rideshare driver was injured while picking up, driving, or dropping off passengers
- Driver of another vehicle was injured in an accident with a vehicle performing ridesharing services
- Passengers in a vehicle were injured in a crash with a rideshare vehicle on its way to pick up a fare
There have been many lawsuits against rideshare drivers who have been accused of unsafe driving because they were using their app while driving to prepare for the next pickup.
Complicated questions of liability followed, including when the rideshare company’s insurance takes over from the driver’s personal insurance policy. The Uber driver didn’t have a rider in the car when he hit the little girl, but he was using the app to get to his next fare.
The case settled for an undisclosed amount, but there have been other cases where claims were made based on a rideshare driver’s distracted driving while using the app.
When are rideshare drivers liable?
Rideshare drivers are classified as independent contractors. They work under a contract with the ridesharing company, are required to meet certain criteria and must maintain their vehicles with certain standards, but they’re not employees.
Most independent contractors in California aren’t covered under an employer’s workers’ compensation insurance. Often, whether or not an independent contractor is required to be covered depends on the nature of the contract. There’s a set of factors that a court would use to determine whether an employer is required to carry coverage on a contractor.
Under most employment agreements, an independent contractor is responsible for their own general liability insurance coverage. California requires rideshare companies to provide additional insurance for drivers.
Under California law, the additional rideshare insurance requirements become active when a driver turns on the app. In other words, a driver would rely on their own auto insurance and any additional collision or personal liability coverage when they’re not acting as a rideshare driver.
But as soon as they turn on the app and are available to give rides, they’re covered under the company’s insurance policy.
California sets insurance minimums according to specific periods of time.
Period 0
This is when a rideshare driver’s app is off (inactive). They are acting as a private person, and their driving is unrelated to their status as a contractor for the rideshare company.
California law requires every driver to carry the following minimum auto insurance:
- $15,000 of bodily injury coverage per person injured in an accident
- $30,000 of bodily injury coverage per accident
- $5,000 of property damage per accident
Ultimately, the driver is responsible for carrying this insurance.
It’s often to your advantage to opt for these additional policies because they can save you a lot of money in the event of an accident.
Period 1
This is when the rideshare app is on and they’re available to riders, but the driver isn’t paired with a passenger yet. In other words, the driver is on standby.
Again, the driver is responsible for carrying the minimum insurance. However, both Uber and Lyft provide insurance to drivers in Period 1 if their personal insurance doesn’t fully cover the amount of the claim.
Uber and Lyft provide the $50,000 and $100,000 coverages, and $25,000 in property damage.
Periods 2 and 3
This is when the driver is paired with a passenger and when the passenger is in the vehicle. These periods triggers a $1 million insurance policy carried by the rideshare company in California to cover both the driver and the passenger.
Uber maintains a $1 million third-party liability policy on the driver’s behalf, along with uninsured/underinsured motorist bodily injury coverage and contingent comprehensive and collision coverage up to the actual cash value of the driver’s car (with a $1,000 deductible).
Lyft maintains a $1 million liability policy. It also offers contingent collision and comprehensive coverage, which means the driver must claim against their personal insurance first. If that claim is denied or not enough, Lyft insurance will cover the remainder. There is a $2,500 deductible. Lyft also carries a $1 million uninsured/underinsured motorist policy.
How to handle a rideshare accident as a passenger
If you were injured in a rideshare accident as a passenger, you’d handle it the same way you would any other personal injury from a California car accident.
The same rules apply for the driver of another vehicle involved in an accident with a rideshare car. If you were in a collision with someone driving a rideshare vehicle, you proceed with the claim the same way you would for any other crash.
When an accident happens, call for emergency services. Even if no one has serious injuries, it’s essential that a police report is filed.
The rideshare company will have a record of who your driver is, the car’s license plate, and even the location where the accident happened — it tracks all of its rides by GPS in real-time.
But, your driver’s first line of defense will be their own insurance company. That’s why you need to gather all the same information you would in any other collision:
- Driver’s first and last name
- Driver’s contact information (address, email, phone)
- License plate number
- Vehicle registration and insurance information
If there are witnesses, write down their contact information as well. Gather any other evidence at the scene, which includes taking photos of all the vehicles involved, road and weather conditions, street signs, or other relevant images.
As soon as possible, report the accident to your insurance company. Your insurer will follow up with the driver’s insurance company and get the claims process started. This is often an “easy lift” for your insurance company because as a passenger, you’re highly unlikely to have any liability (unless your behavior was distracting or illegal).
Read more: What to do following a car accident.
Once you’ve reported the claim to your insurance company, it will begin to establish liability. If the accident involved two or more vehicles (the rideshare vehicle and another vehicle), the claims adjusters will need to determine who was at fault. The driver who was at fault will be responsible for covering your claim.
Unfortunately, sometimes, yes.
It should be the same process as any other car accident claim, but it’s almost always more difficult to deal with a corporation than directly with a person.
Ridesharing companies are notorious for being difficult to reach by phone. Often, the only way to contact them is by email. Depending on the amount of damages in the claim, your insurance company might need to make its claim against the driver’s personal auto insurance policy or the rideshare’s insurance policy—or both.
If your insurance company is having difficulty making a claim, or if the settlement offer you receive doesn’t adequately cover your damages, you should call a California car accident lawyer for help.
How your accident claim is handled by insurance will hinge upon whether the driver was participating in rideshare services at the time of the accident. If they were simply driving for personal reasons unrelated to being a rideshare contractor (Period 0), then it’s handled the same way as any other car accident. But if they were on the way to pick up a passenger, or if they had a passenger in the car, they have additional liability coverage.
If you’ve been involved in a California car accident of any kind, start with the Enjuris Personal Injury Law Firm Directory to find a lawyer who will take your case. It’s the best way to ensure that you’ll receive the damages you need to cover your medical expenses, property replacement, lost wages, and other non-economic damages like pain and suffering.
See our guide Choosing a personal injury attorney.