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What Happens if an Uber or Lyft Driver Causes an Accident?

As a result of evolving technology, ridesharing services such as Uber, Lyft, and Sidecar are becoming increasingly popular in most major cities. While these new transportation options seem more convenient and appealing, it raises a lot of legal issues. Specifically, it raises questions about liability and insurance coverage in the occurrence of an accident. Ridesharing is still a relatively new and unregulated business, so when an inevitable accident happens, it leaves us with the question of “Who is liable?”

As in all car accident cases, the person bringing the claim must be able to prove liability (who was at fault) and damages (how badly the person was injured). To have a claim against Uber or another ridesharing company, you have to prove negligence. In a straightforward case, you would sue the driver and make a claim with his insurer. However, that insurance coverage might not be enough to compensate the injured person because drivers are partially covered by their personal insurance, which typically excludes accidents that occur while a driver is working in the scope of his or her employment. The next logical step would be to sue Uber itself, but that poses some more problems.

When using a taxi, a passenger knows that the driver is an employee of a taxi company and that company would be fully liable in the event of an accident. In constrast, ridesharing companies such as Uber contend that they hire drivers as “independent contractors” instead of employees. Therefore, drivers use their own cars and own personal auto insurance. This allows Uber to deny fault for injuries sustained in an accident. For example, a couple years ago in San Francisco, an Uber driver struck and killed a six (6) year old girl while he was using the Uber app and searching for fares. In their defense, Uber claimed they cannot be held liable for the accident because the driver was not an employee. While Uber has stated that they are not liable for their drivers' behavior, some injury victims have successfully challenged this and held ride-share companies liable for their drivers' actions.

Insurance coverage is another issue. Though Uber requires their drivers to have car insurance and the company provides some additional coverage as well, there is the issue of “gap coverage” because Uber maintains that an Uber driver should be on their own private insurance when they are not transporting a passenger. If the driver is transporting a passenger, Uber’s insurance will cover the incident up to $1 million. However, if the driver was between fares (with the app open), your only remedy will be with the driver’s personal insurance coverage.

The legal landscape of ridesharing services is constantly changing. So, if you have been injured while riding in a ridesharing car or hit by a ridesharing car, contact Ball & McCann, LLP to get started on getting you the compensation you deserve.

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