A growing percentage of the population now participates in some manner in the “gig economy,” working independently of any employer under their schedule. A huge player in the gig economy is ridesharing, offered by such companies as Uber or Lyft. Some drivers who participate as Uber or Lyft drivers do so full-time, while others work only a few hours weekly in order to supplement other employment they may also have.
As personal injury attorneys, we have seen an increasing number of thorny issues arise in collisions where one of the vehicles is being used as a rideshare vehicle. This article will cover some of those issues. 
Rideshare Car Insurance
A traditional cab is specifically purchased as a full-time commercial vehicle-for-hire and carries insurance for that intended commercial purpose. A rideshare vehicle, however, is most often used as a family or personal transportation until one day, the owner decides to earn extra income by transporting Uber of Lyft passengers. Then, once registered with the company, that personal vehicle may then spend part of the week conveying passengers-for-hire. This dual purpose complicates the manner in which such vehicles are insured. Most personal auto policies DO NOT provide coverage when the vehicle is being used “for hire” to transport passengers. So, how does insurance work?
Phone apps offered by Uber, Lyft, and other such services connect an interested passenger with a nearby rideshare driver. Typically, once a driver logs into the app on any given day, indicating they are then available to pick up nearby passengers, the private auto insurance that normally covers their vehicle is suspended. Instead, insurance offered through the rideshare company takes over and provides varying tiers of coverage until the driver logs back out of the app again.
Uber used to partner with an insurance company called James River, which would provide insurance to an Uber car when the driver was active on the Uber app. More recently, Uber ended its association with James River and struck agreements with several different auto insurers to provide such coverage whenever the driver logs onto the Uber app to receive fares. The specific insurance company changes across different regions of the US. In the Maryland/DC/Virginia region, Uber has partnered with Farmers Insurance.
Liability Coverage for Uber Vehicles
As the responsible insurance carrier is subject to change, the amount of insurance can also change depending on when the collision occurs in the job cycle. If an Uber driver is logged into the app but is waiting for or driving to meet an interested fare, and the car is otherwise without passengers, liability coverage is set at $50,000. But once a customer using the app climbs into an Uber vehicle, liability coverage can increase to $1 million per accident. Once the driver fully logs out of the app and no longer receives alerts regarding nearby fares, the insurance will typically revert to the driver’s private auto coverage in whatever amount they purchased for their car.
This complicated system is further complicated by varying state laws, which mandate that certain “required” insurance coverages be provided. An Uber car that passes from Maryland into DC on a single fare can be subject to different state coverage rules too complicated for this article.
Drivers considering using their private auto for rideshare purposes are well advised to carefully review the terms of their home auto policy and any insurance offered by Uber or Lyft. Drivers must be aware of any exclusions or limitations in coverage that could leave them without important benefits after a collision.
Issues with Lost Wages When Injured as a RideShare Driver
At Sussman & Simcox, we have seen two recurring issues when representing rideshare drivers who are out of work after a collision. First, in an ordinary injury case, once a physician has cleared a patient to return to work after a collision, this marks the traditional end-point in a claim for lost wages. Unfortunately, many rideshare drivers are still unable to return to work after a collision because of delays in the repair of their vehicle, which is essential to earning income as a rideshare driver. While the client may be provided a rental car while their personal vehicle is being repaired, the use of a rental car for rideshare purposes is typically not permitted by the rental agency or by Uber. So even though the client is cleared to return to work, they may still face an extended loss of rideshare income as the body shop awaits missing parts, etc. This almost always creates arguments with the opposing insurance company, who is always looking to pay less, not more.
The other issue is how to calculate lost income from rideshareactivities correctly. The Uber app, for instance, has a feature that allows a driver to call up all the earnings from completed fares during a particular time period. This is useful in assessing an average earning per day or week when presenting a claim for lost income. So, if a driver is off the road for ten days after a car crash, and the app shows that they were averaging $100 per day in fare revenue before the collision, we have some basis for claiming a loss of $1,000 in lost earnings. However, most drivers operate as independent contractors and are thus responsible for the expense of keeping their car on the road. Certain operating expenses, such as gas and tolls, are directly tied to carrying passengers for hire. While more passengers may generate more fare income, the driver must also spend more on gasoline or tolls to complete those fares. Thus, those expenses must be deducted from the average earnings to assess the net accurately lost earnings. At Sussman & Simcox, we have an expense formula that we rely on when submitting a lost earnings claim on behalf of a client serving as a rideshare driver.
As you can see, this relatively new employment opportunity is fraught with complications in both insurance coverage and proof of damages. Handling an injury claim on your own could leave you short-changed or completely barred in your efforts to get fair value from the opposing insurance company. We always recommend that you get experienced counsel on your team immediately after a collision.
