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The Insurance Dilemma Of Ridesharing Companies

Ridesharing companies like Uber and Lyft seem to be taking the U.S. by storm. Many people are enamored by how quick and easy it is to call for a ride, and how cheap it is to get a lift to where they need to go. Especially with more and more people moving out of the suburbs and into cities like Baltimore and Washington, D.C., where having a car can be more of a curse than a blessing, the popularity of these ride-sharing companies seems to have no ceiling.

However, all of the convenience of these ride-sharing apps comes at a price. By classifying their drivers as independent contractors and leaving them without benefits, Uber and Lyft not only save lots of money on wages and other payments, like Social Security, taxes, and insurance, but they also isolate themselves from liability in a way that can hurt you as a passenger.

The Insurance Dilemma of Ride-sharing Drivers

The concept of ride-sharing is not new – it is essentially the premise behind a taxi. However, the idea of having people only loosely affiliated with the ride-sharing company get paid to bring people in their own, personal vehicles is a novel twist on the old idea.

Unfortunately, it has taken laws and businesses a long time to catch up to the realities of this development. Car insurance companies like Amica and Nationwide are in the business of providing coverage for drivers, but differentiates between commercial and non-commercial drivers. While Uber and Lyft require their drivers to carry insurance in order to take on riders, many if not most of their drivers have non-commercial insurance. In many states, this type of insurance “turns off” whenever the driver is “driving for hire.”

To fill this potential gap in insurance, ride-sharing companies maintain insurance policies that cover their driver’s liability. These policies carry significantly more coverage than a personal car insurance policy typically does. However, it should come as a surprise to none that these companies frequently throw their drivers under the proverbial bus in any situation they can to avoid making a liability payment.

How This Dilemma Can Impact Your Recovery

The difference between being able to collect against a ride-sharing company’s insurance policy, as opposed to the driver’s personal policy, might be massive. Unfortunately, whose policy is at stake following a catastrophic accident that leaves you injured can be vague or uncertain. For example, when a driver is “on the clock” can be ambiguous, particularly immediately before picking up a passenger and immediately after dropping them off. If you get seriously injured because of an Uber driver at one of these times, you can count on ride-sharing companies trying to get out of the situation by pinning it all on the driver, leaving you to collect what you can to get back on your feet.

Experienced Baltimore Personal Injury Attorneys Can Help

The experienced personal injury attorneys at Gilman & Bedigian have extensive experience with companies trying to avoid paying those injured by their actions. Call our law office at (800) 529-6162 or contact us online.

About the Author

Briggs Bedigian
Briggs Bedigian

H. Briggs Bedigian (“Briggs”) is a founding partner of Gilman & Bedigian, LLC.  Prior to forming Gilman & Bedigian, LLC, Briggs was a partner at Wais, Vogelstein and Bedigian, LLC, where he was the head of the firm’s litigation practice.  Briggs’ legal practice is focused on representing clients involved in medical malpractice and catastrophic personal injury cases. 


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