Ridesharing Rules: Make Sure You Are Properly Covered
At AAA, our commitment to our customers and their safety is paramount. We are passionate about educating our members about insurance-related topics and the safety factors that accompany them. A hot new topic involves transportation network companies, such as Uber, that have exploded in popularity as of late.
If you’re not yet familiar with Uber, it is a ridesharing business that allows individuals to use an app to find a driver to transport them, much as a taxi would; however, these drivers use their own personal vehicles. These businesses can offer rides for less than it would typically cost to get a taxi, and they have been innovative in helping people find new ways to move around their communities.
The major difference between a service like Uber and a traditional taxi service is how customers arrange rides with drivers and the pricing structure. With Uber or Lyft, passengers use an app on their smartphone to arrange for a driver to pick them up. Pricing for ridesharing varies, depending on the time of day and the demand for rides. These companies also do not hold themselves out as transportation service providers, making it very clear that they operate no vehicles, but rather provide software technology to drivers and passengers.
Despite all of these positive factors, there is the issue of potential insurance gaps. Specifically, some personal auto insurance policies may not provide coverage for commercial transportation. Uber and Lyft require all of their drivers to procure personal auto insurance and offer drivers some supplemental coverage, but loopholes may exist, and some policies have ambiguous language relative to what’s covered and what’s not. If a driver's policy specifically excludes driving for hire, the driver may have no insurance if he or she gets into an accident, leaving you at risk.
Coverage issues can also ensue when the driver is logged into the app but hasn’t yet picked up their passengers. Uber and Lyft are still relatively new services, and their procedures continue to evolve as issues arise. As a result, state regulators and insurers are weighing in and trying to roll out new policies intended to address any discrepancies. States vary significantly in their legal treatment of these services, and if you rideshare regularly, it's a good idea to know what your state requires of their drivers.
If you are using Uber or another ridesharing company, call one of our knowledgeable insurance agents at 1-866-315-1252 and we can answer any questions you have relative to ridesharing and any other auto insurance considerations. Also, when you contact Uber, make sure to take advantage of your discount, with AAA members receiving $20 off their first ride. We are always here to help with safety tips, important information, discounts, and more.