Since Uber and Lyft, also referred
to as Transportation Network Companies (TNC), have become mainstream forms of
transportation, litigation involving on and off-duty drivers has also been on
the rise. This increase has also required regulations to quickly evolve.
Families and victims of various incidents and crimes related to TNC drivers
have filed suit against both the individual drivers and these companies. Uber
responded with an expanded insurance policy providing supplemental coverage to
meet the growing demand and use of their service. Still, consumers remain
concerned whether this increase is sufficient to meet safety standards required
of taxicab drivers in their state,i or to address the rate of growth in the
ride-sharing transportation sphere.ii
Currently, there are three tiers of
Uber’s insurance coverage for their drivers. While the app is turned on and the
driver is waiting for passengers, drivers are provided a minimum of “$50,000
per person/$100,000 per accident for bodily injury,” and “$25,000 per accident
for property damage.”iii This
is the first tier and it matches the minimum requirement for common carriers in
Nevada.iv Building from there, the second tier of coverage begins
once a driver is en route to pick up a passenger, and the third is while a
passenger is in the vehicle.
Uber’s second and third tiers are a
significant amount of coverage starting at $1,000,000 on Third Party Liability
and Uninsured or Underinsured Motorist Bodily Injury. Additionally, Uber offers
Contingent Collision and Comprehensive coverage in concurrence with the
personal insurance for the Uber driver which is limited to the value of the
driver’s vehicle. There is a minimum
deductible of $1,000 for Uber and $2,500 required of Lyft drivers.v
While this may sound substantial,
we must weigh all the pros and cons of traveling with taxicabs or other types
of common carriers in Nevada compared with requesting a ride on an application
provided by the ease of access on our cell phones. Follow the link to find
details of liability requirements for Nevada’s common carriers: https://cogburnlaw.com/blog/overview-taxicab-liability/.
In most states, TNC drivers are not
considered private drivers, nor are they wholly common carriers either. There
are many factors that policy makers must consider while debating the
qualification of TNC drivers. Laws across the country are under review to the
advantage of TNC drivers and the benefits of their customers.iv A 2014 Colorado law doesn’t address the issue
of competition between taxis and TNCs; however, CO Senate Bill 14-125vii
does cover many of the gaps which have been making passengers uneasy. The
Colorado bill requires TNCs to have a commercial insurance policy in place.
Drivers are also mandated to inform their personal insurance providers of their
TNC work; thus, decreasing or eliminating the possibility a claim would be
denied.
Still, the dilemma regarding the
safety of each passenger from the driver
remains. It is a distinct and primary concern apart from negligent harm by the driver (which may result in a
vehicular accident.) The requirements for common carriers in Nevada appears
nuanced to allow subjectivity into the hiring process. For common carriers in
Nevada,viii felonies are only disqualifying if potential drivers
were convicted of the crime within the past five years. Whereas, with Uber, the
company states any felony committed in one’s adult lifetime is a
disqualification for employment. Uber highly regards their standard for the
personal safety of TNC passengers.ix
However, they may want to reevaluate their relationship with Checkr,x
the company outsourced to conduct new hire backgrounds checks. Because while
Uber’s language in their hiring requirements is less ambiguous than that of
Nevada’s taxicabs,xi there still appears to be flaws in their hiring
process, and on-going litigation, as seen in the headlines.xii
As TNC’s continue to grow, the lack
of due diligence in the hiring may jeopardize the personal safety of passengers
using these services, as they do now for any passenger who uses Nevada’s
taxicabs. Not only would special liabilities allow for lackluster minimum
insurance coverage, but would weaken the already underwhelming background
checks conducted, by allowing case-by-case subjectivity to hiring process of
potential drivers. Stricter enforcement and oversight of current policies in
Uber’s hiring may provide better safety measures moving forward.
The excessive or supplemental
coverage provided by Uber provided the state minimum while the app is on which
is also backed by the driver’s personal policy. Even if, hypothetically, a
claim was denied by the driver’s personal insurance provider, it would be
covered by the third tier (or lowest), as it is backed by Uber’s supplemental
coverage. This is still comparable to the “$50,000 per person/$100,000 per
accident for bodily injury” and “$25,000 per accident for property damage”xiii
required of Nevada’s common carriers. It is not a safer bet to require TNC’s to
obtain special insurance because they are covered to the same extent as any
taxi, in Nevada. Furthermore, when an Uber driver is in the process of
facilitating a ride he is covered in excess. Therefore, the current policy
provides a greater level of protection to driver, rider, and other travelers or
pedestrians.
There is a stronger cause for
action for a plaintiff injured by a TNC driver when the special liabilities, as
it currently stands, required of common carriers do not apply. The personal
insurance claims of TNC drivers, which Uber relies upon, in some states like
Nevada, to fill the gaps of their “excessive coverage,” could be denied. Yet,
this is only an assumption not based on fact since each case is considered
differently to insurance providers, as they are before the Courts.xiv Nevertheless, all instances of motor vehicle
transport are volenti non fit injuria,
or have an assumption of risk. Therefore, each case, depending on its state
regulation, must be litigated based on individual circumstances.
Specifically regarding the policies
in Nevada, no, Uber and Lyft and other TNC companies should not be subject to
the same special insurance and liability rules under which taxicabs currently
operate.
NOTES
