At a time when technology is advancing our lives in every imaginable way, UBER has single handedly transformed passenger transportation unlike any other single entity since Ford Motor Company! UBER’s software application allows a person desiring transportation to almost immediately electronically hail a vehicle from many locations in North America, and countries around the world. The primary reasons for UBER’s success is SIMPLICITY and CONVENIENCE, especially as compared to the old school methodology of calling a taxi dispatch company, waiting from someone to answer, waiting an unknown period of time for the car to arrive, and facing an unknown fare for the trip. UBER solves these inconveniences by communicating immediately with the passenger relative to the transport vehicle’s arrival time, trip cost, which is electronically billed to the passenger’s credit card, and in some cases including a photo of the driver. What could possibly be better?
For all the conveniences UBER has presented, there is a wake of destruction being created when something goes wrong for both the UBER driver AND passenger. As you may suspect, there are literally myriads of accident cases traversing through the American Judicial system as we speak, and only time will reveal the outcome as to UBER’s legal responsibility in these matters. Is UBER merely a convenient “technology” company, or a “passenger transportation dispatch company”? We will also learn this answer on a jurisdiction by jurisdiction basis as there are myriads of legal cases that have been brought by conventional passenger transportation companies and regulators around the country, either seeking to cease UBER’s operations in the area altogether or require UBER to submit to the same regulations that the traditional livery dispatch companies must adhere to within their business operations.
You may be thinking “so what, how does all this affect me, the UBER driver”? Simply put, if your automobile insurance is written on a Personal Insurance basis (i.e. – not a Commercial Insurance basis), and an accident occurs, there is a reasonably high likelihood that your Personal Insurance company will deny claims emanating from your UBER driving activity. When you assume the role of being an UBER driver, for a fee, you become a Commercial “for-hire” operator and need to procure Commercial Insurance. Personal Insurance is not priced to accommodate the increased exposure to loss that acting as a Commercial “for-hire” passenger transportation company creates. As you may surmise, Commercial Insurance is virtually always more expensive than Personal Insurance, and interestingly, Commercial Insurance will protect the vehicle owner and/or operator during times of personal use, whereas Personal Insurance generally will not protect the vehicle owner/operator for Commercial Use. You may next be thinking “So, what happens if the insurance company successfully denies the claim for my UBER driving accident?”. In that case, you as the vehicle owner or operator, if a separate person, are completely exposed to whatever verdict the Court elects to impose, which will typically attach your personal assets, home, savings and potentially your future earnings.
In short, if you are an UBER driver, you need to evaluate your insurance program carefully to ensure you are properly protected. Call Sovereign at 866-455-5413 to speak with a representative that has specialized knowledge of the livery industry, or submit an inquiry online.
Sovereign Risk Solutions looks forward to helping drivers navigate this complex and rapidly evolving industry, and your resulting insurance needs.
Author: John Varner