Ride-share alternatives to taxi services are becoming more popular as they expand to more cities. But because they’re so new, both riders and drivers should exercise caution.
Ride-share programs on the surface sound like a win-win situation: if you need a ride, you can download an app to your mobile device to find and arrange transportation in a driver’s personal vehicle. A simple swipe of your credit card pays the driver. So, instead of hailing a taxi cab ̶ which can sometimes be hard to do ̶ you can quickly get where you need to go and the driver is paid for his or her time and distance traveled.
Ride-share drivers, passengers, other drivers on the road and even pedestrians could all be affected by the insurance protection provided by the network companies that coordinate the ride-share relationship. Some ride-share network companies advertise that they have insurance policies that can protect drivers and their passengers. But there is no standard policy, and without a policy in hand, it becomes difficult to know which specific circumstances trigger coverage or what situations might be excluded.
Beyond the common-sense concerns related to getting into a car with a stranger, what happens in the unfortunate event of an accident?
If you or a driver in your family is interested in providing transportation services through a ride-share service, check with your insurance agent first to learn about uninsured liability you may be assuming and what, if any, coverage is provided by your personal auto policy. Taxi companies purchase commercial coverage specifically designed to insure livery exposures.
But personal auto policies were not designed to cover exposures like ride-sharing, and livery is typically excluded. Ride-share drivers cannot assume that their personal auto insurance will provide protection for anyone injured or any property damaged in an accident, even if they provide transportation for hire only on a part-time or incidental basis.
Riders planning to use ride-share services should also consider the risks. If you are injured while using one of these services, will your medical expenses be covered? Would you be compensated for the time lost from work that your injury might cause? Ask to see proof of insurance before using a ride-share service.
The ride-share industry is changing rapidly, and states are gearing up to provide more oversight and regulation. Until they do, consider carefully the risks you take on as a rider or driver.