Insight

Uber Negligence

Who is responsible for gig economy car accidents?

Litigating ride-hailing services
DK

Daniel Katz

September 13, 2019 02:30 PM

You are probably already familiar with Uber, Lyft, and other players in the ride-hailing services space. These companies are similar to many taxi-based services in that they do not own, operate, or control the vehicles used by their drivers, nor do they classify their drivers as employees. In simple terms, drivers contract with these companies to pick up passengers, i.e., the users of their mobile apps. Their customers cannot hail an Uber or Lyft on the street with a fancy whistle or wave. Instead, in this gig economy, they must utilize the app on their phone and arrange for a driver to pick them up and taxi them to their destination.

While these new services have made car travel more convenient, they haven’t made it any safer, and some evidence suggests that they have contributed to more motor vehicle injuries and deaths. According to a study conducted by the University of Chicago’s Booth Business School, motor vehicle fatalities have increased by approximately 3 percent nationwide since 2011—the year in which ride-hailing apps were introduced into most major U.S. cities. But when it comes to litigating car accidents in the gig economy, who exactly is responsible?

As in any car accident or personal injury case, the person pursuing the claim must prove two key things in order to be compensated: liability and damages. Liability centers around who is at fault and damages relates to the claimant’ from the incident. While car accidents (with the passenger as the claimant) are the most common situations in cases involving ride-hailing services, they may also involve incidents such as a driver hitting a pedestrian, running into a bus full of passengers, and other unique conditions.

What Next?

If the negligent party in one of these cases is the driver, the obvious course of action would be to refer the claim to the driver’s personal insurance carrier—similar to the process consumers are familiar with when it comes to car accident claims. But since an Uber or Lyft contractor is driving for money (i.e., a commercial driving service), the situation quickly gets more complicated.

In terms of assessing a case involving one of these drivers, the facts will always be integral to how it progresses, from which insurance carrier is involved to any potential compensation limits. Simply having proof that the driver was at fault is the tip of the iceberg. Key information needs to be verified, such as when the accident occurred; if the driver had already been hired by the ride-hail customer; was an uninsured (or underinsured) driver involved in the accident; and many different aspects that affect how each case is formalized.

Assessing the insurance situation is critical to success in each case. As personal car insurance typically excludes all business use, the driver may not be covered by their policy when they are available for hire but have not yet accepted a ride request, according to the National Association of Insurance Commissioners. If a driver has a commercial policy (or has purchased a ride-hailing “endorsement,” an option in some states) the driver’s personal policy will typically not be a factor. The extra coverage offered by the endorsement may help fill the gaps between the ride-hailing company’s commercial policy and the driver’s personal auto insurance policy.

Uber and Lyft offer liability insurance to their drivers, which will kick in when the driver’s carrier has denied the claim (drivers must submit the claim to their own insurance carriers first). So legal responsibility aside, it is possible to hold a ride-hailing company financially responsible if you are a nonnegligent person in an accident caused by one of their drivers.

Lyft and Uber drivers must carry a commercial policy in order to have passengers in their vehicle. The specific dollar amount available depends on the standing or status of the ride-hailing driver at the time of the accident and based on the following established guidelines:

1) Driver Not Available

If the driver is using their vehicle for personal use and is not available to accept requests for rides from customers, the ride-hailing company’s policy does not apply. Instead, the driver’s personal policy applies. The coverage limit is based on their own personal automobile insurance policy.

2) Available but Not Carrying Passenger(s)

If the driver is available on a mobile app and ready to pick up passengers, but is not actually carrying a passenger when the accident occurs, the primary insurance is the driver’s own policy. However, Uber and Lyft provide additional coverage in this situation with liability up to $50,000 per injury, with a maximum of $100,000, and a maximum of $25,000 in property damage. This coverage only applies if the driver requests coverage from the ride-hailing company and if their own personal liability coverage does not cover all of the damages.

3) Available and Customer-Connected or Carrying Passenger(s)

If the mobile app is turned on and the driver has connected with a potential passenger for pickup or if the driver is on the way to pick up the passenger, then a $1 million insurance policy limit from the ride-hailing company will apply. If the passenger is in the vehicle at the time of the accident, then a $1 million policy will apply. For example, if the driver is carrying a passenger when the accident occurs, the driver and passenger are covered under the liability insurance policy. Additionally, if a third party is injured, such as a pedestrian, they are covered by the company’s policy. However, if the company denies coverage, the driver and passenger may still be denied by the driver’s personal insurance policy because the driver was driving for pay at the time of the accident.

4) Uninsured and Underinsured Motorists

Typically, companies such as Uber and Lyft also carry a $1 million uninsured/underinsured motorist policy so that if an uninsured driver causes the accident this policy will apply.

The company’s insurance carriers will try to avoid paying out as many claims as possible, as this is the nature of the beast. It is not uncommon for accident claims to be denied by the ride-hailing company’s carriers. Another key element that makes these situations more complex is that ride-hailing companies do not consider their drivers to be employees, but rather independent contractors. This distinction has allowed the companies to deny liability when their drivers are involved in accidents. Companies are generally not liable for the actions of independent contractors, as opposed to those of their employees. This makes the process even more complicated for passengers to get compensated when a driver was at fault (e.g., driver was distracted, drunk, or driving recklessly).

One response by accident victims and their attorneys may be to sue the ride-hailing company directly. They may also seek payment from the driver’s personal insurance company. But as many insurance policies prohibit their insured from driving for work purposes or using their car as a taxi or ride-hailing vehicle, suing the driver directly may limit the amount of damages that can be received.

The Dangers of App-Based Driving

It is also important to keep in mind that the success of the ride-hailing model depends on the use of mobile apps—and not just for the consumer. And these mobile applications require inherently risky and potentially negligent behaviors behind the wheel.

Let’s start with how a driver gets a potential customer: When a pickup request comes in, the driver’s smartphone will deliver visual and audio notifications. Next, the driver has seconds (it’s been said that in the case of Uber, 15 seconds) to accept the request. Then the driver must physically tap the screen to accept the “contract.” Ride-hail requests can (and will) be delivered to a driver’s phone at any time—including while the vehicle is moving—meaning that in order for drivers to secure a fare, they must take their hands off the wheel to confirm a pickup.

Not surprisingly, the risky behavior does not stop there. While passengers are in a vehicle, drivers must again turn to their phone—this time for directions. Uber describes its offering as a “redesigned navigation experience built around drivers’ needs.” This “experience” relies on proprietary algorithms that process multiple levels of information in real time (traffic data, road closures, accident reports, weather, etcetera) to deliver the most direct route to the drivers. The bottom line is more and more distractions with the goal of fewer delays, better mileage, and happier customers—since they will arrive at their destination as quickly as possible.

It is important to assess the amount of time and focus that is taken away from the actual act of driving and spent using a smartphone. This is, essentially, time spent not focusing on the road. Research shows that engaging in such behaviors for as little as two seconds can affect a driver’s ability to spot danger—significantly increasing the risk of an accident. At this time, data measuring how much time drivers (of all kinds) spend staring at their phones instead of the road and how that translates into accidents is still lacking.

We do know the obvious—that distracted driving causes accidents, increases the risk of a crash, and ends up killing people. According to the National Highway Traffic Safety Administration, 3,166 people were killed by distracted driving in 2017. Over time, more and more data will continue to help substantiate the statistics. We also know that based on a common sense understanding of the ride-hailing model, more driving will mean one thing: an increase in the number and size of payouts to complainants moving forward.

NHTSA:

https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/812700

Daniel Katz is president and founder of RDK Interactive, a full-service technology firm specializing in web and mobile development, business strategy, start-up guidance, and consulting for nearly 30 years. RDK Interactive serves corporate clients such as Comcast, NBC, PBS, and the University of Pennsylvania & The Wharton School plus many law firms such as MOREMARRONE LLC, Dilworth Paxon, Faruqi & Faruqi, GPFF, Willig, Williams & Davidson among others. RDK Interactive's work has won the touted Webby Award along with other industry accolades such as the W3 Gold Award "Recognizing the Power of Web Creativity."

Related Articles

IN PARTNERSHIP

Civil Litigation: How Trial Lawyers’ Efforts Help Communities


by Esquire Bank

There are many upfront costs when trying cases on a contingency fee model. However, Reza Torkzadeh is willing to fight to get the justice his clients deserve.

How Lawyers Like Reza Torkzadeh Help Communities

IN PARTNERSHIP

Dedicated Advisors and Advocates


by John Fields

Best Lawyers recipient Joseph F. Brophy continually instills confidence in his clients, representing a wide range of individuals and businesses in Austin.

Man in suit posing for lawyer headshot

Is Premises Liability the Same as Negligence?


by Jeremy Wilson and Taylor Rodney Marks

In today's age, we are always on the move, often inhabiting spaces we don't own. But what happens when someone else's property injures you or someone you know?

A pair of silhouetted legs falling down a hole with yellow background

IN PARTNERSHIP

Easton & Easton: Let Our Family Help Yours


by Justin Smulison

For more than 50 years, Easton & Easton have continued to be the go-to trial law firm for injury and wrongful death claims in Southern California in 2023.

Group of lawyers pose at table with globe in forefront

IN PARTNERSHIP

Protecting and Fighting for Florida’s Future


by Justin Smulison

Trial lawyer and Best Lawyers® “Lawyer of the Year” multiple times, Steve Yerrid discusses how his courtroom results have improved safety and life in Florida.

Lawyer in blue suit smiles for headshot photo

Understanding Statute of Limitations in Personal Injury Cases


by Best Lawyers

In personal injury cases, the statute of limitations can vary depending on several factors. To navigate the process, consider hiring a legal professional.

Animated woman holding a clock and coin while balancing on plank

Unwavering Dedication to Clients


by Best Lawyers

Trial attorneys Michael Lyons and Chris Simmons find motivation when the result means everything.

Trial Attorneys at Lyons & Simmons

Truck Safety Watchdogs


by Best Lawyers

Unqualified, Poorly Trained Truck Drivers and Unsafe Trucks Heighten Roadway Dangers

Truck Safety and Roadway Dangers

We Are Women, We Are Fearless


by Deborah S. Chang and Justin Smulison

Athea Trial Lawyers is a female owned and operated law firm specializing in civil litigation, catastrophic energy, wrongful death and product liability.

Athea Trial Law Female Leadership and Success

Cost to Boss


by Gregory Sirico

New Colorado legislation aims to stop employers from dodging direct negligence claims.

Employers Dodge Direct Negligence Claims

Don’t Let Insurance Companies Take Advantage of You


by Christopher J. Marzzacco

Find out how you can avoid being taken advantage of by insurance companies. Learn the tactics they use to underpay injured victims and what you can do to fight back.

Don’t Let Insurance Companies Take Advantage

Brophy & Devaney, PLLC


by Best Lawyers

Joseph F. Brophy embraces his reputations for his zealous representation of his clients and is passionate about learning their businesses and problems and ensuring that their rights are protected and their interests are maximized, whether by way of litigation or transaction.

Joseph Brophy Best Lawyers 2020

Unwanted Advances


by Natalie Weatherford

The #MeToo movement has brought unprecedented attention to the problem of sexual assault and abuse. Litigating civil cases along these lines can be tricky, though. Here’s an overview.

Litigating Civil Sexual Assault Cases

Why You Should Never Admit Fault After a Car Accident in Philadelphia


by Ryan Zavodnick

It Will Hurt Your Insurance Claims

Never Admit Fault After a Car Accident

Are Cell Phones to Blame for a Rise in Rear-End Car Accidents?


by Michele Mirman

Distracted Driving Is Causing More Accidents

Cell Phones and Rear-End Car Accidents?

Up To the Challenge


by Justin Smulison

Leading the Litigation for the 2016 Silver Spring Apartment Explosion

Fights for justice

Trending Articles

2025 Best Lawyers Awards Announced: Honoring Outstanding Legal Professionals Across the U.S.


by Jennifer Verta

Introducing the 31st edition of The Best Lawyers in America and the fifth edition of Best Lawyers: Ones to Watch in America.

Digital map of the United States illuminated by numerous bright lights

Unveiling the 2025 Best Lawyers Awards Canada: Celebrating Legal Excellence


by Jennifer Verta

Presenting the 19th edition of The Best Lawyers in Canada and the 4th edition of Best Lawyers: Ones to Watch in Canada.

Digital map of Canadathis on illuminated by numerous bright lights

Legal Distinction on Display: 15th Edition of The Best Lawyers in France™


by Best Lawyers

The industry’s best lawyers and firms working in France are revealed in the newly released, comprehensive the 15th Edition of The Best Lawyers in France™.

French flag in front of country's outline

Presenting the 2025 Best Lawyers Editions in Chile, Colombia, Peru and Puerto Rico


by Jennifer Verta

Celebrating top legal professionals in South America and the Caribbean.

Flags of Puerto Rico, Chile, Colombia, and Peru, representing countries featured in the Best Lawyers

Unveiling the 2025 Best Lawyers Editions in Brazil, Mexico, Portugal and South Africa


by Jennifer Verta

Best Lawyers celebrates the finest in law, reaffirming its commitment to the global legal community.

Flags of Brazil, Mexico, Portugal and South Africa, representing Best Lawyers countries

Announcing the 13th Edition of Best Lawyers Rankings in the United Kingdom


by Best Lawyers

Best Lawyers is proud to announce the newest edition of legal rankings in the United Kingdom, marking the 13th consecutive edition of awards in the country.

British flag in front of country's outline

Discover The Best Lawyers in Spain 2025 Edition


by Jennifer Verta

Highlighting Spain’s leading legal professionals and rising talents.

Flags of Spain, representing Best Lawyers country

Prop 36 California 2024: California’s Path to Stricter Sentencing and Criminal Justice Reform


by Jennifer Verta

Explore how Prop 36 could shape California's sentencing laws and justice reform.

Illustrated Hands Breaking Chains Against a Bright Red Background

Announcing the 16th Edition of the Best Lawyers in Germany Rankings


by Best Lawyers

Best Lawyers announces the 16th edition of The Best Lawyers in Germany™, featuring a unique set of rankings that highlights Germany's top legal talent.

German flag in front of country's outline

Celebrating Excellence in Law: 11th Edition of Best Lawyers in Italy™


by Best Lawyers

Best Lawyers announces the 11th edition of The Best Lawyers in Italy™, which features an elite list of awards showcasing Italy's current legal talent.

Italian flag in front of country's outline

Tampa Appeals Court ‘Sends Clear Message,” Ensuring School Tax Referendum Stays on Ballot


by Gregory Sirico

Hillsborough County's tax referendum is back on the 2024 ballot, promising $177 million for schools and empowering residents to decide the future of education.

Graduation cap in air surrounded by pencils and money

Find the Best Lawyers for Your Needs


by Jennifer Verta

Discover how Best Lawyers simplifies the attorney search process.

A focused woman with dark hair wearing a green top and beige blazer, working on a tablet in a dimly

Key Developments and Trends in U.S. Commercial Litigation


by Justin Smulison

Whether it's multibillion-dollar water cleanliness verdicts or college athletes vying for the right to compensation, the state of litigation remains strong.

Basketball sits in front of stacks of money

Woman on a Mission


by Rebecca Blackwell

Baker Botts partner and intellectual property chair Christa Brown-Sanford discusses how she juggles work, personal life, being a mentor and leadership duties.

Woman in green dress crossing her arms and posing for headshot

Best Lawyers Celebrates Women in the Law: Ninth Edition


by Alliccia Odeyemi

Released in both print and digital form, Best Lawyers Ninth Edition of Women in the Law features stories of inspiring leadership and timely legal issues.

Lawyer in green dress stands with hands on table and cityscape in background

The Human Cost


by Justin Smulison

2 new EU laws aim to reshape global business by enforcing ethical supply chains, focusing on human rights and sustainability

Worker wearing hat stands in field carrying equipemtn