Ride sharing applications such as Uber and Lyft are fast becoming more popular in many cities throughout the US. However, these applications are not without their issues.
Each of these applications has its differences, but for the most part they all operate on the similar platforms. A person would download the application and put a credit card on file with the company. When a request for a ride is sent, the passenger can view the driver’s information, photo and route to the pickup location. The fares are quite reasonable and are subject to time and day surcharges. The company takes approximately 20 to 25% of the fare and the balance goes to the driver.
Overall, this new way of getting to and from locations has offer many people a way to go out on a Friday or Saturday night have a few drinks and know that they will be able to get home safe without having to drive. I don’t know if there is any new research showing a reduction in DWI accidents in areas that Uber and Lyft operate but I would believe that they have contributed to help lowering the chance of accidents through their services.
Are there any risks associated with these rides sharing applications? Yes, and passengers as well as drivers need to know the pitfalls. For potential drivers and current drivers, you need to inform your insurance carrier on what you are doing. Many if not all personal auto carriers will not provide coverage for any usage of the vehicle for a fee. Check with your individual carrier as many are looking for ways to provide some coverage prior to the actual pickup of a passenger. As for the passengers the risks are greater, these companies do little to check on their drivers and passengers need to be aware of who is picking them up. Don’t share personal information with anyone, tell someone that you intend to take a ride share and share this information with them. I have heard of many passengers offering the driver cash to pick later in the evening after being dropped off. This act of circumventing the app, will void the insurance coverage that is provided by the service. As for well-being always wear your seat belt, make certain that they driver is taking the correct route, try not to ride alone if you are a female and if the driver is driving in an unsafe manner demand that he/or she pull over and get out of the vehicle as soon as possible. Then report any unsafe driving to the carrier immediately. Ride sharing is expanding and until our local governments regulate this new industry it’s important to be an informed rider or driver.
Risk There are also insurance-related risks for passengers:
o If you are injured in an accident due to your Uber or Lyft driver, there is a high probability their will be a gap in your coverage that hinder you from receiving the protection you should
o Not having your own auto insurance policy in this situation, significantly increases the likelihood of a gap in protection.
Risks for drivers
• As with passengers, ride sharing drivers also face significant safety concerns, similar to those that taxi services deal with.
• Insurance-related risks for ride sharing drivers are more severe than for passengers:
o A traditional auto insurance policy does not cover you while you are driving for a ridesharing service like Uber or Lyft.
-Insurance companies reserve the right to deny coverage in the case of an accident, including physical damage to the vehicle.
– Many insurance companies will cancel or non-renew your policy altogether if they discover that you’re ridesharing.
o Though Uber and Lyft provide varying degrees of insurance coverage for drivers (only when the app is on; based on whether a driver is en route to a passenger or has one in the vehicle), this coverage can be denied for various reasons and may not be enough to cover damages.
o Options beyond a traditional auto insurance policy – like a commercial driver policy or a policy tailored specifically for ride sharing – are few in Michigan and cost more than a standard policy.