Uber Negligence

Who is responsible for gig economy car accidents?

Litigating ride-hailing services

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.


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

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

A Texas-Sized Reputation

by Justin Smulison

Dan Sciano’s proven record of success and leadership has made him a highly sought-after plaintiff’s litigator in the Lone Star State.

Dan Sciano: Expert Civil Litigator

The Fighter From New York

by Justin Smulison

Benedict Morelli discusses recent successes and high-profile casework.

Benedict Morelli of Morelli Law Firm

Safeguarding the Community

by Sean Stonefield

When companies put profits over safety, trial attorney Daniel J. T. Sciano steps in.

Daniel J. T. Sciano of Tinsman & Sciano, Inc

Masters in the Courtroom

by Best Lawyers

A look into The Law Offices of Frank L. Branson and the notable work of its lawyers against negligence.

Law Offices of Frank L. Branson

Self-Driving Vehicles and Federal Preemption

by C. Richard Newsome

Well-developed negligence and strict products liability law already provide the best solution for those instances where self-driving technology fails and results in injury or death.

Vehicle and Federal Preemption

Trending Articles

A Celebration of Excellence: The Best Lawyers in Canada 2024 Awards

by Best Lawyers

As we embark on the 18th edition of The Best Lawyers in Canada™, we are excited to highlight excellence and top legal talent across the country.

Abstract image of red and white Canada flag in triangles

The Long, Short, Thick and Thin of It

by Avrohom Gefen

“Appearance discrimination” based on employees’ height and weight is the latest hot-button issue in employment law. Here’s a guide to avoid discrimination.

Woman stands in front of mirror holding suit jacket

Trailblazing Titans of the Industry: Announcing the 4th Edition Best Lawyers: Ones to Watch® in America

by Best Lawyers

Best Lawyers honor and celebrate these talented, innovative newer lawyers who are trailblazing their way to victories in courtrooms across the country.

Connected web above map of the U.S.

Announcing the 2023 The Best Lawyers in America Honorees

by Best Lawyers

Only the top 5.3% of all practicing lawyers in the U.S. were selected by their peers for inclusion in the 29th edition of The Best Lawyers in America®.

Gold strings and dots connecting to form US map

Pearls of Wisdom: Celebrating 30 Editions of Best Lawyers’ Rankings

by Best Lawyers

In celebration of our landmark 30th edition, Best Lawyers’ leadership explains how the world’s original and most trusted legal awards maintain their esteem, integrity and reputation for excellence among the top legal entities and their clients.

Best Lawyers logo for 30th edition release with gold glitter in background

Vanguards of Victory: Best Lawyers: Ones to Watch in Canada 2024

by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in Canada™ has been announced, and the lawyers showcased by these awards are rising to the challenge each day as advocates for clients all across the country.

Blue and black background with small squares connected by lines

Best Lawyers: Ones to Watch in America for 2023

by Best Lawyers

The third edition of Best Lawyers: Ones to Watch in America™ highlights the legal talent of lawyers who have been in practice less than 10 years.

Three arrows made of lines and dots on blue background

Announcing the 2023 The Best Lawyers in Canada Honorees

by Best Lawyers

The Best Lawyers in Canada™ is entering its 17th edition for 2023. We highlight the elite lawyers awarded this year.

Red map of Canada with white lines and dots

The Best Lawyers in South Africa™ 2023

by Best Lawyers

Best Lawyers proudly announces lawyers recognized in South Africa for 2023.

South African flag

What the Courts Say About Recording in the Classroom

by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?


How Long Does a Felony Stay On Your Record in California

by Peter Blair

A felony can remain on your record for life in California. Some felonies qualify for expungement. Learn how to remove a felony conviction from your record in California.

Hand setting bird free out of a guarded fence


Thomson Rogers: Toronto Personal Injury Lawyers

by Thomson Rogers

Since establishment in 1935, Toronto-based firm Thomson Rogers has consistently delivered results for their clients struggling through complex litigation.

Top of a Staircase Featuring Two Large Black Doors with Bookshelves and Chairs on Each Side

Incendiary Behavior

by Lyssa A. Roberts and Rahul Ravipudi

California’s future will see more frequent wildfires caused by faulty equipment. Litigation tied to recent Golden State infernos shows the way forward.

Mountain range with glow of wildfires behind it

The Upcycle Conundrum

by Karen Kreider Gaunt

Laudable or litigious? What you need to know about potential copyright and trademark infringement when repurposing products.

Repurposed Products and Copyright Infringemen

Announcing the 2022 Best Lawyers® in the United States

by Best Lawyers

The results include an elite field of top lawyers listed in the 28th Edition of The Best Lawyers in America® and in the 2nd Edition of Best Lawyers: Ones to Watch in America for 2022.

2022 Best Lawyers Listings for United States

The Best Lawyers in Australia™ 2024 Launch

by Best Lawyers

Best Lawyers is excited to announce The Best Lawyers in Australia™ for 2023, including the top lawyers and law firms from Australia.

Australian Parliament beside water at sunset