What you need to know before using your smart phone app to hail a ride-share service such as Uber, SideCar or Lyft.
Maybe you don’t have second thoughts about jumping into a car with a pink furry mustache on its grill, but for those who do there is a lot to consider if you wish to use one of the popular new app-based ride-sharing services here in California.
The three largest Transportation Network Companies (TNC) as these ride-sharing services are called in California, offer a cheaper alternative to a traditional taxi, shuttle or limousine service. While they are all based in San Francisco, these companies have expanded across the United States as well as into some other countries.
Uber Technologies was the first company to create a ride-sharing service app in 2009 to offer people who needed a ride an alternative to the high cost of a taxi service. Uber says it has 160,000 drivers in the United States who drive at least four times a month.
A few years later in 2012, newcomer Lyft Inc. created a similar service and distinguished itself from the Uber drivers with a pink furry mustache placed on the front grill of a driver’s vehicle.
A third player in the app-based ride-share business is Sidecar and it also was founded in 2012.
Whether the service is legal or not can differ from city to city or state to state. These services are now regulated in some states including California and most recently Nevada, however, other states such as Massachusetts have imposed fines on drivers up to $500 because these drivers do not have a commercial license to operate this type of service.
Under California law, Uber, SideCar and Lyft are neither a “passenger stage corporation” which charges passengers individually for a shared vehicle such as airport shuttles do, nor a “charter-party carrier” which charges passengers by either time or distance such as a limousine. Instead, these ride-sharing companies are categorized as Transportation Network Companies (TNC) and as such are required to have background checks on drivers.
While these basic ride services are regulated in California, newer services such as UberPool and LyftLine offered by these companies that are more like carpooling services are actually illegal under California Public Utilities Commission Section 5401. The service allows a driver to pick up multiple paying passengers and make multiple drop offs at a discounted price similar to a shuttle service.
How to hire a ride with Uber, SideCar or Lyft?
Using a smart phone, a customer can place an order for a driver to pick them up and pay using the same smart phone for the ride.
A driver who is in your area is alerted and your request is sent to them. If they are available to take you where you are going, they will let you know their estimated time of arrival and will pick you up. The drivers range from ordinary people who want to make extra money in their spare time to more entrepreneurial ones who do this full time as their job. There are even some former taxi drivers who have made the shift to these ride-share companies as they gain popularity.
Some of the apps allow you to see who your driver is and they also have feedback scores from previous customers who share their experience with the driver. The driver may also review the customer so both driver and rider get reviewed on their behavior.
Unlike a taxicab, your ride will be in the driver’s personal car. Typically, the cost of the ride is lower than a taxi and tips are optional as opposed to the standard 15 percent most cab drivers expect. Sidecar drivers are also able to set their own prices and can offer even lower prices to drum up business.
So Who is Behind the Wheel When You Call Uber, SideCar or Lyft for a Ride?
Drivers must also be 21 years old and have driven for one year or more. Also, potential drivers cannot have more than three moving violations or any major violations such as reckless or DUI driving for the past three to seven years depending on the company. Drivers must have their own insurance policies as well.
All three services require drivers to provide their social security number for a criminal and DMV background check. The background checks also cover sex offender registries in counties and the federal level.
There are also requirements are that you have a vehicle that is 2000 or newer, has at least four doors and cannot be a salvage vehicle. When you sign up you are required to sign that your vehicle meets these specifications. The vehicle must also be registered and you must have authorization to drive it if you are not the owner.
Are these Ride-Sharing Drivers Qualified to Drive?
Unlike a licensed taxicab driver, ride-share drivers do not have a commercial license, they have no special training and no commercial driving license or experience. These unregulated drivers may have up to three infractions on their record.
These ride-hailing companies only accept drivers who have undergone both a criminal and a Department of Motor Vehicles background check. Uber, for example, performs a background check that checks the criminal and DMV history of a driver for the past 7 years and drivers are permitted to drive if they have no more than three moving violations.
What if You Accept a Ride with an Uber, SideCar or Lyft Driver and Get Hurt?
Under California TCN regulations, however, Uber, SideCar and Lyft Inc. are all required to carry policies that cover their drivers and provide at least $1 million in coverage. This coverage is in effect from the time a driver accepts a ride through the app until the transaction is completed or the ride is over. This leaves many drivers with a gap in insurance coverage.
The gap comes into play when a driver who is actively seeking work as a driver and they are logged into the app to receive passengers, but they do not actually have a passenger and they are not on their way to pick one up.
While these drivers are self-employed and are required to carry their own personal car insurance, most insurance companies will not insure a car for both commercial and personal use. If a driver uses their car for paying passengers, their personal insurance doesn’t cover them. Most insurance companies will also cancel a driver’s policy if they find out they are driving for one of these TCN companies.
These drivers would have to buy a more expensive commercial insurance policies to protect themselves and passengers, but for some it’s cheaper to hide the fact that they are an Uber or Lyft driver from their insurance company.
According to the National Association of Insurance Commissioners this creates a coverage gaps for drivers who work for Transportation Network Companies. Specifically, a driver may be logged into the app, but they have not been matched to a passenger. This is what happened in San Francisco when a 6-year-old girl was killed by an Uber driver in a pedestrian accident. The case is currently active and the outcome is pending.
Recently, however, Geico, USAA and MetLife are the first insurance companies to create pilot programs in a few states in an effort to provide insurance to drivers between gaps bridging the gap between personal and commercial use.
Uber, Lyft and Sidecar’s have also extended their insurance coverage to drivers to help cover the gaps.
Additionally, both Uber and Lyft policies provide underinsured and uninsured motorist coverage, but SideCar presently does not.
Are Ride-Share Drivers Too Distracted?
Another problem with drivers who work for TCN companies, is they can become distracted by calls requesting them to pickup passengers which are sent to an app on a driver’s cell phone. This can be especially dangerous to pedestrians, bicyclists and other motorists. At least two people have been killed by Uber drivers due to alleged distracted driving.
Uber driver Syed Muzaffar struck and killed a 6-year-old girl in San Francisco when he allegedly failed to yield to pedestrian Sofia Liu and her family on Dec. 9, 2013. He was logged into the Uber system waiting for a customer, but had not actual passengers in his vehicle. At the time, there was no gap insurance in place and the victims were unable to qualify for coverage under Uber’s policies.
Also, on January 3, 2015, Erin Sauchelli, 30, was hospitalized and her boyfriend Wesley Manning, 27, was killed after they were hit by Uber driver Aliou Diallo’s black Mercedes SUV while crossing E. 62nd Street at Lexington Avenue in Manhattan, New York.
There were no passengers in either of the drivers’ cars at the time of the two above crashes and this was prior to drivers having gap insurance. Despite this, the attorney representing the victims in this New York case have brought Uber into a lawsuit claiming the company should have known its app would be a distraction to its drivers and that it’s a violation of state law to drive distracted.
Johnson Attorneys Group Can Help
If you were hurt in a collision involving a driver working for Uber, SideCar or Lyft there is help available. Johnson Attorneys Group provides a free consultation to prospective clients who suffer an injury or lose a loved one in a crash. Contact us today at 800-235-6801 to speak with an attorney.
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