Lyft, Uber, and Sidecar are some of the emerging apps that have become popular among citizens. They are apps that link customers to drivers, usually costing less than regular taxis. However, they aren’t that economically sound for the drivers employed by the companies. Drivers like Adrian Anzaldua find themselves caught in an insurance limbo that can end up costing them some major damages if they were to end up in a car accident.
When driving for rideshare companies such as Lyft and Uber, drivers must have their own insurance, with the companies carrying $1 million excess liability policies to cover damages acquired by their drivers. But even with such stipulations, the paid drivers find themselves in a limbo. Where insurance companies would usually cover the damages of drivers, things get trickier when drivers are transporting paying customers. This causes an insurance gap for drivers like Anzaldua, who only worked for Lyft for two months, before quitting for fear of an accident.
In states like California, drivers must obtain a commercial license if they drive for profit. Since ridesharing is a fairly new company, insurers and drivers may not know to ask about such insurance policies. Or, because of the extra steps, drivers may be inclined to conceal that they are driving paying customers. Anzaldua was shocked when he learned how many other Lyft drivers did not know about the dangers using their cars as taxis or that they were hiding the fact.
Many taxi drivers and companies have complained that it is not fair for ridesharing companies to conduct the same business without having a commercial license. Anzaldua is looking for new insurance policies to help cover his venture into ridesharing but finds that the insurance is more expensive. Such cases illustrate the changes and definitions needed for ridesharing companies.