Uber, Lyft, and Sidecar have become commonplace among on-demand ride services. Though many passengers see these companies simply as modernized and convenient taxi services, in reality Uber, Lyft, and Sidecar have major fundamental differences with the taxi industry that affect everything from the passenger's personal safety to the liability limit on the driver's insurance.
One major difference is the extent of the background check services used to hire their drivers, an issue that was highlighted by the recent shooting in Kalamazoo, Michigan. Taxi companies require their drivers to pass full background checks that will compare drivers' fingerprints to crime databases. But these can take 14 weeks to complete.
Instead, Uber uses HireEase, a private company that provides background checks. HireEase should report convicted crimes from any time in a person's life, but the Fair Credit Reporting Act limits HireEases's range of reporting on crimes that did not result in a conviction to the last seven years. Jason Dalton, the Kalamazoo Uber driver who killed 6 people, had several six driving infractions between 1990 and 2006, and some may not have appeared on his Uber background check.
The appearance of secure drivers has been a particularly important issue for Uber. Earlier this month Uber agreed to pay $28.5 million to settle a class-action lawsuit for misleading the public about the safety of Uber rides from its “safety ride fee.”
Uber also uses a feedback system that allows passengers to rate their drivers so the next passenger can see the average rating, but studies of these public rating systems reveal flaws. Though a rating of “average” would appear to fall between 3 and 4 stars, many passengers know that Uber requires its drivers to retain at least a 4.6-star rating, meaning a vote of 4 stars can lead to a driver's dismissal. Passengers often rate accordingly leaving drivers with higher than earned ratings. Dalton, the Kalamazoo Uber driver, had a rating of 4.73 stars out of 5.
Driver qualifications for all three services change from state to state, so passengers should look up their state-specific qualifications.
Another point of disconnect between these three new ride service companies and other taxi services are their insurance policies. Uber drivers are technically private contractors of the company, so who is responsible for compensation if a passenger is hurt?
One side will tell you that Uber's privately contracted drivers leave passengers totally uninsured. Uber will tell you that drivers are insured up to $1 million for injured passengers. The truth is somewhere in between.
Since Uber drivers are independent contractors, the company's $1 million insurance policy will not cover them in every aspect of their job. Uber and Lyft have already had issues with this in the past where both companies attempted to place blame for an accident on the driver, releasing the companies from their policies.
The other problem with the policy is the cap itself. Families of injured or killed passengers of these new ride services argue that $1 million is not adequate compensation for the death of a loved one.
As services like Uber grow in popularity, states are beginning to step in and create their own qualifications for driver security and for insurance policies.