A recent Tampa Bay Transportation Forum put on by the Tampa Bay Partnership raised the issue of having ride-share companies operate in Tampa Bay. Ride sharing companies will be able to operate in the Tampa Bay area only with support from local governments. Ride sharing services allow users to connect with nearby drivers using a smartphone app. The drivers use their own personal vehicles, and riders pay with credit cards through the app. Some county regulators say that the service is illegal and the companies don't meet insurance and background check requirements currently required of licensed taxi companies.
Controversy over insurance coverage has become a sort of Achilles’ heel for the fast-growing ride-service industry as it fights numerous regulatory battles in multiple cities and states. In January, the California Department of Insurance issued a warning to ride-service drivers about potential gaps in coverage that could leave them liable in an accident.
It’s one reason the taxi industry is so angry: They pay for primary insurance, which is more expensive because it covers more claims than excess insurance. As a result of insurance requirements, licensing, and back ground checks, taxi fares tend to be higher than ride sharing fares. Typical ride sharing drivers carry non commercial private insurance on their own vehicles, but rely on the ride sharing service to provide excess coverage or secondary insurance. A problem arises when drivers’ own policies refuse to cover commercial use of the auto. Most personal auto insurance policies contain an exclusion for transporting passengers for hire, use of the vehicle as a taxi, or any other commercial use. If a ride sharing driver had to pay for a commercial use or taxi type policy they would have to pay much more or their insurance, thus making the concept of individuals using their own vehicles as taxi cabs less cost effective.
This puts ride sharing drivers in a tricky spot. They could tell their insurance carrier the truth about their commercial use of the car and run the risk of the insurance carrier canceling their policy, or fail to mention their rides-for-rent operation and hope the insurance company didn’t ask what they were doing with the vehicle in the event of a claim.
As long as drivers are on a call, (logged in to the app) they are supposed to be covered by the ride sharing insurance policy, but questions arise regarding coverage when they are not carrying a passenger, or on the way to a call. Some insurance companies exclude commercial activity only when a paid passenger is in the vehicle, but some have policy language that excludes any commercial activity, even if a driver is simply out looking for a paid passenger. Drivers should ask insurers, if they are covered during the period when they are looking for paid passengers but haven’t found one yet, and should be completely up front and honest with their insurance carriers letting them know that they are using their personal vehicle as a taxi.
If you are considering using a ride sharing service, here are some questions to ask yourself; What kind of driving record does the driver have? What insurance coverage is available in the event of an accident? Has the driver undergone a background check or have a criminal history? How well has the vehicle been maintained and is it safe? What coverage would exist if I am injured while riding in the ride sharing vehicle?
While you may save a couple bucks by taking a ride sharing service instead of a licensed taxi, that savings could be more than offset by the risk you are taking when you get in that vehicle.
For more information or a free consultation on your legal issue contact Scott and Fenderson PLLC, your injury law and family law attorneys, at 727-321-0099. http://www.scottandfenderson.com
