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Are Ride Share Companies Like Uber And Lyft Skirting Their Legal Repsonsibilities?

Posted by: at 7:25 PM on August 13th, 2014

With the arrival of the new ridesharing vehicle services Uber and Lyft there are a lot of questions that are coming up both here in Milwaukee and nationally. The two firms call themselves technology firms, not cab companies.  While laws and guideline vary by municipality, many cities regard both Lyft and Uber as taxi companies that pick up and deliver passengers for a fee. Here in Milwaukee a heated debate has been growing with city personnel and law enforcement looking at developing new regulations for these services or enforcing current taxi regulations on the two businesses.

"One of the biggest and most concerning questions that has arisen with these new services is who is liable when there is an accident," said Attorney Jeff Morgan of Milwaukee's LeBell, Dobroski, Morgan & Meylink.  "Currently, liability as it pertains to a company like Uber and Lyft largely varies by city or state".

For its part, Uber argues its drivers can work whenever they please and that they are contractors, not company employees.  That being the case, each individual's insurance coverage can vary wildly.

Until recently, Uber had a million-dollar insurance policy covering potential damages only from the moment a passenger hails an Uber driver with the Uber app until the moment the passenger is dropped off.   If the Uber driver is looking for passengers and is involved in an accident, the company's insurance is not in play and any accident and/or damages would fall to the driver's insurance.  Lyft had a similar driver insurance policies. 

In March, both companies begin rolling out a plan to expand coverage for drivers, but many argued that the coverage was still subpar at only $50K cap for those injured by ride share drivers.

A January accident in San Francisco highlighted the drawbacks of the ride share companies. On New Year's Eve in San Francisco, six year-old Sophia Liu and her mother were struck by an Uber driver resulting in severe bodily harm to the mother and killing Sophia. The company claimed Uber driver Syed Muzaffar was not covered by their insurance because he did not have a passenger. 

Attorney Chris Dolan, who is representing the Liu family in a lawsuit against Uber, said Muzaffar's insurer has only offered them $15,000, Uber has offered nothing and Sofia's mother's medical bills have topped over $500K due to her injuries.

"To say that someone's life is worth $50,000 when they're ten feet away from being picked up by a ride and then somehow worth a million dollars when there's someone in that car taking a ride is ridiculous," said Dolan."When these vehicles cause this type of harm, who's going to pick up the tab?" he said. "It's going to wipe out the savings of both the drivers being sued and the passengers and pedestrians who are hurt."

With thousands of drivers working for Uber and Lyft nationwide, odds are that there will be accidents and more court cases.  

"As we see in today's society, many times the courts are playing "catch up" in developing guidelines for new services and technology," said Attorney Morgan.  "I'm sure that in the coming months we will see changes in expectations, licensing and operation of as it relates to ridesharing companies."