Should App-Based Car Services Provide Insurance Between Rides?
People have scrutinized Uber’s approach to insurance in the past. But this terrible accident on New Year’s Eve brings a specific question into focus. Should app-based taxi and ridesharing should provide insurance to cover drivers while they’re between rides but actively looking to pick up passengers?
To be clear, there’s no way of knowing what exactly caused Muzzafar’s car to collide with the family. We also don’t know if he was between Uber rides, heading out to start work, on his way home or elsewhere, or giving a ride booked outside of Uber.
Old Uber Driver app
Ridesharing and taxi app drivers do typically use a dashboard-mounted phone opened to an app that shows nearby requests for rides, though. Unlike a traditional GPS system that simply points drivers to their destination, car service apps often directly ping drivers with pop-ups and sounds whenever someone nearby asks for a ride. Drivers may have to respond quickly to secure the fare, or another driver may swoop in and claim it. These apps could be distracting to drivers by pulling their attenton off the road and onto their phone, even if they haven’t accepted a ride yet.
That means the apps could negatively influence a driver’s on-road safety even when they’re not actively on their way to pick up a passenger or currently transporting them. Some might consider this reason enough for these services to extend insurance as long as the driver has the app open and is receiving digital hails from potential passengers.
For comparison, taxi accidents happen quite frequently, but taxi drivers and their vehicles are insured at all times, whether or not they’re in the middle of a ride or on the way to pick up a passenger. Taxi Magic‘s Director Of Marketing Matt Carrington clarified that “In SF, any taxi driver is going to have commercial insurance on their vehicle, and if they are aligned with a fleet, the fleet will also have an insurance policy.”
If rideshare and car services don’t provide insurance whenever drivers partnered with them are working, it could create an insurance gap. A rideshare driver might only have personal insurance that might not cover them while they have a rideshare app open, but the rideshare service might not cover them between rides. That means in the case of an accident where victims have significant medical bills, the driver’s personal insurance could deny the claim and the rideshare service could deny liability. That means the victims may only be able to sue the driver for their personal assets, which may not be enough to cover the medical bills.
By bringing up this issue, I’m not trying to blame Uber or any other service for accidents, which are typical in transportation. I’m saying that app usage by ridesharing and car service drivers may impair driving, and so there should be a discussion of whether car services should extend insurance to drivers whenever they have their apps open, not just when they’re on an official job.