Over the past decade, transportation network companies (TNCs), also referred to as rideshare companies, have undergone tremendous growth. Once a humble San Francisco-based startup, Uber is now one of the most successful companies, not just in the rideshare industry but the whole world, with more than $50 billion in value and operations in over 66 countries and 449 cities worldwide. Uber is so successful that they are majorly cutting into the taxi industry’s business – and for good reason. Simply put, Uber is much more convenient and cheaper than taxis.
However, Uber’s business model has caused a lot of controversy and drawn a lot of scrutiny from regulators. They classify their drivers as independent contractors, not employees, which brings up issues regarding fairness, security, and so on. The biggest issue, though, has been one of accidents and liability: if a person is hurt in an accident involving an Uber driver, what happens?
Uber’s Three-Part Insurance Structure
The three-part structure of Uber’s insurance policy addresses all possible accident scenarios:
- When a driver’s app is turned off, they are covered by their own insurance.
- When a driver’s app is turned on and they’re in between trips, they’re covered by their own insurance plus additional contingent liability coverage provided by Uber ($50,000 injury/$100,000 total/$25,000 property).
- From the moment a driver accepts a trip to its conclusion, they are covered by a $1 million liability coverage policy plus a $1 million uninsured/underinsured motorist bodily injury coverage policy.
So how does Uber’s three-part insurance structure play out in the real world? Let’s go over two possible scenarios:
- Let’s say a passenger is injured in an Uber accident. Theoretically, that passenger would be entitled to injury coverage of up to $1 million, depending on the circumstances. However, they would not be able to sue Uber for damages exceeding $1 million, due to the classification of Uber drivers as independent contractors.
- What if a bystander (pedestrian, bicyclist, motorcyclist, other motorist) is injured in an Uber accident? The amount of coverage depends on whether the driver had a passenger at the time of the incident or not. In the former case, Uber’s insurance would cover this incident up to $1 million, whereas in the latter case, the driver’s personal insurance coverage would apply, with Uber providing contingent liability coverage with much lower limits (50k/100k/25k).
It should be mentioned that this may change in the future as Uber faces more pressure (especially in California) to grant their drivers employee status.
Getting an Uber Accident Lawyers Is a Must
Whatever the case, it is highly advised that you consult with an experienced Uber accident lawyer before initiating the claims process. Without professional legal assistance, you may get lowballed by the insurance company. For a fighting chance at full and fair compensation for your losses, get legal help.
About the Author:
Bobby Saadian, Esq. is the Founding President and Managing Attorney at Wilshire Law Firm. Known as the “People’s Lawyer,” he primarily handles major accident and catastrophic injury cases of many varieties, including Uber accidents, car accidents, motorcycle accidents, truck accidents, pedestrian accidents, and wrongful death.