Uber, Lyft, and other rideshare enterprises started in San Francisco and then spread across the globe. They’re popular because they’re convenient and cheap – users can request a ride on a smartphone app, the car goes straight to their location, and the prices are lower than taxis. This new business model has gotten a lot of scrutiny from regulators and a lot of pushback from the taxi industry. It also brings up interesting legal questions. If you’re hurt in a car crash while riding in an Uber, what happens?
Uber’s Insurance Policies
Uber has a three-part insurance structure to cover their drivers and passengers. When the drivers are not available to pick up passengers, they’re covered by their own personal auto insurance. When drivers are available but haven’t yet picked up a passenger, they’re covered by their own personal insurance plus additional contingent liability coverage. That coverage goes up to $50,000 per injury for a total of $100,000 and up to $25,000 in property damage, if the driver’s personal insurance doesn’t cover the issue. Finally, drivers who are on a trip with a passenger are covered by a $1 million liability coverage policy and a $1 million uninsured/underinsured coverage policy (in case of accidents with un- or under-insured drivers). That’s more than the minimum required around Ohio – it’s usually about $300,000.
So, you’re covered, right? Well… maybe. Things are a bit murkier than they seem.
Uber Drivers Are Third-Party Providers
Uber classifies its drivers as independent contractors, or third-party service providers. In other words, they’re not Uber’s employees. Some employment law specialists may object to that classification, but it also has an impact on Uber’s liability for its employees’ actions. In general, a company is liable for the actions of its employees while they’re working. A company is not liable, on the other hand, for the actions of third-party contractors. Uber hasalready expressly denied liability for the death of a 6-year-old in San Francisco because the driver that hit her was between fares.
So, the insurance coverage may be effective, but you may not be able to sue Uber for damages based on the actions of its drivers, especially when they’re not actively carrying passengers. To make matters worse, there has been speculation that the insurance coverage might not even be as good as it sounds and coverage may in fact be denied to injured riders. That’s because drivers are partially covered by their personal insurance, which typically expressly excludes accidents that occur while a driver is working.
So, what’s going to happen when there’s an Uber crash? Let’s take a look at two possible scenarios:
Uber Passenger Is Injured
Uber’s insurance theoretically covers this up to $1 million. It theoretically covers the passenger’s injuries even if the crash was caused by the other driver but the other driver didn’t have insurance. However, Uber maintains that you can’t sue it for damage that exceeds $1 million even if the driver was reckless or negligent. In other words, you can’t claim damages from Uber in court if your driver turned out to be drunk and crashed. You could sue the driver, but the driver is unlikely to be able to pay much by way of damages.
This outcome is dependent on Uber’s own classification of its drivers as independent contractors. A lawsuit may result in a decision that Uber’s drivers are actually its employees, meaning that Uber would be liable for their actions.
Bystander Is Injured By Uber
So, what happens if a pedestrian or the driver or passenger of another car is injured in a crash with an Uber? Assuming Uber’s drivers are independent contractors, the issue here is whether the driver was on duty or not. If the driver was on a trip, Uber’s insurance will cover this incident up to $1 million. If the driver was between fares or off duty, you’re stuck with the driver’s personal insurance coverage. Basically, it will be just like getting in a wreck with any other car on the road. You’ll need to exchange insurance information and hash it out through the insurance companies.
Again, this depends on Uber’s classification of its drivers. If the drivers are actually employees, then Uber is responsible for what they do while they’re on the job.
Other Legal Issues
In addition to the fuzzy issue of injury by an Uber driver, there has been a lot of concern lately about the actions of Uber drivers toward their passengers. After several rape and assault allegations, Uber has started to require its drivers to submit to background checks. Unfortunately, that may not be enough to stop the abuse. Who is responsible in the event that a driver harms a passenger? The answer is simply unsettled law.
Uber claims that it is not responsible for the actions of its drivers because of the independent contractor issue, meaning you may be left without recourse if an Uber driver hurts you. You’ll be able to pursue the driver, but you’re unlikely to be able to get much by way of damages from a driver in a personal injury suit. Uber has much deeper pockets but it denies liability. Like the other issues mentioned above, this is going to shake out through lawsuits filed by Uber passengers and perhaps even drivers.
Have you been injured by an Uber driver?
We may be able to help. We have decades of experience in personal injury and auto accident cases and we’re standing by to help you fight for the compensation you deserve. If you’ve been injured, you may be entitled to compensation for medical expenses, lost wages, emotional harm, and more. Contact us today for a free case evaluation and consultation. We’ll make sure you understand your options and we’ll help you choose the one that’s best for your unique circumstances and goals.
Prior to forming Dyer, Garofalo, Mann & Schultz, Doug worked as a bodily injury claims adjuster for a large insurance company. This unique experience has been a tremendous asset to Doug in his fight to achieve maximum cash settlements for his clients in minimum time. Since departing from the insurance company, Doug has dedicated his entire legal career to helping injured clients when they need it the most.