|By Brian Heaton, Government Technology|
|McClatchy-Tribune Information Services|
Drivers working for transportation network companies (TNCs), such as Lyft and Uber, typically do so under their own personal insurance policies. Most of those don't cover commercial activities, however, leaving the TNCs' "excess" contingent liability coverage to cover the gap. But drivers and their passengers can still be on the hook for unexpected costs, if claims on a TNC's insurance are denied.
The ride-sharing companies have developed strict lines when they consider one of their drivers to be "working," and therefore covered under excess liability policies. Lyft changed its policy to provide primary coverage from the point a driver accepts a ride request until the time the ride has ended in its app, according to
But the different standards being used have caused confusion for the insurance industry, passengers and riders, resulting in some states introducing legislation to regulate coverage levels and paint a clearer picture for all parties involved.
But while the legislation to clarify ride-sharing insurance questions looks like progress, representatives from the insurance and taxicab industries still have major concerns with what lawmakers are doing.
For example, if someone looking for a ride spots a driver from Uber or Lyft and hails them down without using the company's app, and the driver is not logged into the company's system, it could pose insurance coverage problems if an accident occurs. Those "under-the-table" rides are common, according to
"If I'm a ride-sharing driver, and I see somebody on the street and they see my Uber logo, if I pick them up, I'm going to get the money," Sutton said. "It'd have to be cash, but I'm not going to have to pay Uber, so I'll make more."
Passmore added that the preference of insurance companies is that drivers purchase a commercial policy, or obtain something that provides them with 24x7 coverage. He also felt the term "app-on, app-off," in regard to when a particular insurance level applies isn't sufficient, because whenever a driver is looking for a passenger, the nature of their activities and of the risk presented by it have significantly changed.