Ride Share Liability Risks

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TrafficIt wasn’t that long ago if you didn’t drive, didn’t want to drive or if your car was in the shop, your options were limited to asking a friend, calling a taxi, taking the bus, renting a vehicle or hiring a car service. While in larger cities car and ride-sharing services have always been popular, they were generally thought of as a service used only by the wealthy and powerful. In 2009 Uber appeared on the horizon and a year later began operations in San Francisco. First operating with a fleet of luxury cars, they quickly morphed into the UberX program of today; individuals using their own personal cars to transport people throughout the community.

Fast forward to 2015 and UberX is not only surviving but thriving because of the service these automobile owners provide. Uber has become a popular option in Charleston, Myrtle Beach, Columbia and Greenville, in spite of concerns from other ride-sharing businesses that UberX drivers don’t have mandatory and adequate insurance on their personal vehicles. While these drivers are required to carry personal auto insurance almost all standard personal auto policies contain exclusions “for liability arising out of the ownership or operation of a vehicle while it is being used to carry persons for a fee.”

This recently was resolved after the South Carolina Department of Insurance received commercial auto insurance policies covering UberX drivers through all three of the service phases: scanning the Uber app for people requesting a ride, on the road to pick up passengers and then while transporting passengers to their requested destination.

Raiser LLC, the arm of Uber that runs the UberX app, now provides liability coverage of $50,000 per person, $100,000 per accident, $25,000 for property damage per accident and a $1 million liability policy for any wrecks or other situations UberX drivers may cause, contribute to or be involved in. This insurance is in addition to the personal automobile insurance each UberX driver is required to carry at all times; though South Carolina Department of Insurance director Raymond Farmer said, “Drivers probably would be denied coverage by their insurers because state law says personal policies can’t cover vehicles used for commercial purposes.”  Farmer went on to say, “Raiser’s two policies don’t appear to have any gaps in coverage while drivers are using UberX.”

Raiser stepping up to the plate is huge in the quickly changing ride-sharing business. But one thing many who use UberX on a regular basis generally don’t consider is if there are any ramifications to you personally if your driver is involved in an accident. Could you be held liable if the other party is injured or their car damaged? Or what if the driver accidently hit a pedestrian or bicyclist?

While across the country Uber has been involved in accident lawsuits, none have gone to trial so no ride-sharing precedents have been set. Many in the legal profession believe it is only a matter of time though. They also agree Uber drivers are basically independent contractors which protect the actual Uber company from most liability; though it could be considered under the principals’ vicarious liability doctrine.

Currently with the new insurance requirements in place here in South Carolina, it looks like UberX passengers shouldn’t have anything to worry about. But if you are involved in an auto accident and have suffered physical injuries, mental and emotional distress and/or personal property damage, please contact Dan Pruitt Law Firm for assistance.

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