What’s the deal with Uber?
It’s a question I’m being asked much more frequently lately as a Los Angeles car accident lawyer. The ride-sharing app and its competitors are shaking up the peer-to-peer transportation community, and raking in billions of dollars at the same time.
But current legal issues surrounding Uber and Lyft may forecast problems for both companies.
Last week, Uber was fined over $7 million for failing to provide statistical information to California regulators. The judge in that case ruled that Uber should be suspended until it complies.
Similarly, authorities in other states are investigating whether Uber properly complies with handicapped-transportation laws.
Other issues are brewing too. Last month, the California Labor Commission ruled that Uber has been misclassifying its drivers as independent contractors. That ruling is under appeal, but the consequences will be huge if Uber will be required to classify its drivers as employees.
Nevertheless, here is what you need to know about Uber.
Uber says that it provides up to $1 million in insurance coverage for passengers injured while using its services. That means if you hail an Uber, and are in an accident, Uber has you covered.
But what if an Uber driver rear-ends or hits someone else, and that person is hurt? That’s where things get complicated.
Uber says it requires its drivers to maintain sufficient insurance coverage through their own auto insurance policies for these types of accidents.
But this may not be accurate. Auto insurance companies routinely deny coverage when a vehicle is used for commercial purposes. Ride-sharing for payment is most certainly a commercial use.
And since Uber claims that its drivers are independent contractors, the company would not be liable for the negligence of its drivers. So an accident victim can’t collect from the driver’s insurance, and can’t collect from Uber. This could leave many without financial recourse, and it’s the subject of ongoing litigation in the courts.
Until the courts clarify this issue, liability for Uber and Lyft will remain unclear. To analogize, if someone is hit by a UPS driver delivering packages, UPS would be on the hook for any damages. Why should Uber and Lyft be any different?
The Rabbi Lawyer will continue to monitor this issue. For questions about your case, my office is here to assist.