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Uber wrongful death lawsuit highlights insurance grey area for rideshares

by AirTalk®

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A Lyft customer gets into a car on January 21, 2014 in San Francisco, California. As ridesharing services like Lyft, Uber and Sidecar become more popular, the San Francisco Cab Driver Association is reporting that nearly one third of San Francisco's licensed taxi drivers have stopped driving taxis and have started to drive for the ridesharing services. Justin Sullivan/Getty Images

Popular ride-sharing app Uber is facing a wrongful death lawsuit after one of the company's drivers, Syed Muzaffar, struck and killed a 6-year-old girl and injured her mother and brother in San Francisco on New Year's Eve.

This is the first wrongful death lawsuit against the company. Uber has distanced itself from the driver, claiming the company is not responsible since Muzaffar was not carrying a fare at the time. The company deactivated Muzaffar’s account after the accident. Muzaffar's attorney, Graham Archer, claims he was working for the company, was logged into the app at the time and had just dropped off a passenger.

"He's a father of 4, so he would have been at home with his family if he hadn't been working for Uber in San Francisco," Archer told AirTalk in a statement. "He was logged into the application, he had dropped off a fare and was looking for a new fare in an area."

The case highlights a grey area when it comes to how these ride-sharing companies handle insurance. Uber carries a $1 million policy, but it's only valid when the driver is carrying a passenger. That means drivers idling or cruising in search of fares may be left without coverage.

Personal insurance policies do not cover drivers if they're operating as a livery or conveyance service. In addition, ride-sharing companies like Uber and Lyft are not required to carry commercial insurance required of taxi companies.

The Uber Help Center FAQ page briefly addresses insurance issues stating:

If you’re taking a ride requested through uberX, some transportation providers are rideshare drivers providing transportation with their personal vehicles. Rideshare providers carry personal insurance policies. In addition, there’s a commercial insurance policy with $1 million of coverage per incident.

This policy covers drivers’ liability from the time a driver accepts your trip request through the app until the completion of your trip. This policy is excess to the driver’s own policy, but it acts as primary insurance if the driver’s policy is not available for any reason.

In addition, there is uninsured/underinsured motorist coverage (UI/UIM) of $1 million per incident for bodily injury, in case another motorist causes an accident and doesn’t carry adequate insurance. So, for example, injuries caused by a hit-and-run accident would be covered by the UI/UIM.

Should drivers for ride-sharing apps like Uber and Lyft be required to carry commercial insurance? If a driver for these companies is working, but not carrying a passenger, should they be covered under the company's insurance?


Rob Wood, lawyer with Wood LLP in San Francisco, and author of the book Legal Guide to Independent Contractor Status, now in its 4th edition; he has written about Uber and ridesharing for Forbes.

Pete Moraga, Spokesman for Insurance Information Network of California

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