Who Pays When An Über or Lyft Driver Causes An Accident?

The 21st Century transportation renaissance is not without controversy, as issues of car accident fault, compensation and insurance continue to plague “peer-to-peer” car-for-hire companies such as Über and Lyft. Both companies recently entered the Cincinnati market and have quickly become targets due to their nebulous legal status.

Peer-To-Peer Car Services Avoid Local Laws and Regulations

Über and Lyft are two examples of taxi-like businesses that harness the power of today’s smartphone culture to offer on-demand for-hire rides around town. Unlike conventional cab companies, Über and Lyft employ amateur drivers using their own personal vehicles to transport passengers from location to location. The cars are not marked, although Lyft utilizes a prominent pink mustache on the front of all vehicles used in conjunction with their service.

In Cincinnati and several other communities, such “peer-to-peer” car services have come under fire from certain circles, particularly from cab owners and drivers who are obligated by law to pay certain fees and submit to testing and inspections. In the “peer-to-peer” model, those in need of a ride log into the Über or Lyft app and find the nearest willing driver. All fares are paid through the app and no cash—not even a tip—changes hands. Arguing that they’re simply pairing willing drivers with those in need of rides, the companies avoid most for-hire laws and regulations.

What Happens When There’s an Accident?

But what happens when an Über or Lyft driver is in an accident? Car accident fault, insurance and compensation are all matters of law for traditional cab companies. Both drivers and vehicles are licensed and regulated through the state or municipality. There are insurance requirements imposed upon drivers and cab owners, and there are cab-specific laws governing car accident fault, insurance and compensation. For Über and Lyft, it is the Wild West.

While both Über and Lyft carry insurance that applies when drivers accept passengers through the service, the insurance is more often than not secondary to their drivers’ own personal insurance policy. Furthermore, there are serious issues relating to insurance and compensation that arise when an Über or Lyft driver is “on the clock” but not carrying a passenger.

Liability Unclear When Driver On Call But Not Transporting Passenger

The case of Syed Muzaffar, an Über driver charged with vehicular manslaughter after killing a 6-year-old girl in an accident in San Francisco, raises serious questions regarding exactly who is responsible when rideshare drivers are involved in accidents. Über is denying liability because Muffazar was not carrying a passenger at the time of the accident. Victims will have difficulty obtaining compensation for their injuries in these situations, absent specific laws and regulations that define car accident fault, insurance and compensation requirements for rideshare companies.