Transportation controversies continue to rage over ridesharing companies. Uber and other companies are accused of illegal transportation of passengers, and drivers who break the law in this regard may have their insurance policy revoked, according to a recent Nevada Transportation Authority report. Insurance revocation could mean that these drivers would not be covered in the event of an accident.
How Does Rideshare Work?
Companies like Uber, Lyft and others operate by allowing private citizens to use their cars to transport others for pay. Would-be riders download an app that allows them to find drivers in the area and pay them for a ride. The practice has generated concern for some time about insurance coverage as well as safety for both drivers and riders.
Two representatives of the Nevada Insurance Council and the Property Casualty Insurers Association confirmed that their companies expect the Nevada Transportation Authority to support them in their stand against Uber and other companies. They also outlined their concerns about the safety of riders. If a rider accepts a ride with an Uber driver who is uninsured, that person may not have coverage for his or her injuries if an accident occurs, according to insurance industry experts.
What Happens When Uber Drivers Make Claims?
While San Francisco-based Uber has assured the public that drivers are covered by at least $1 million in liability insurance, the Nevada Taxicab Authority and the Transportation Authority have continued to cite drivers and impound their vehicles if they are caught picking up passengers in Clark County.
Taxicab owners and companies have been particularly concerned about the problem because they say that Uber drivers are not required to meet the same standards as cabs, effectively giving them an unfair advantage in the market. They claim that not only do Uber drivers fail to take out proper insurance coverage but they also escape the licensing requirements that form a part of a cab driver’s overhead expenses.
Commercial auto insurance would probably cost substantially more than a typical consumer policy, so the speculation is that many Uber drivers do not take out these types of policies. Further, it is not clear whether the $1 million required liability police it will “drop down” to provide primary coverage if the driver’s own coverage does not apply. In other words, if driver’s own insurance will not pay, the extra policy may not pay either, leaving the driver with no coverage at all.
If you have been the victim of an accident involving a rideshare driver, contact Bernstein & Poisson in Las Vegas for information on how to protect your rights and recover compensation.