We have heard of new companies like
Uber and Lyft that have taken over the ride share community in Chicago. A
simple app on your phone will help you track down a driver to take you
somewhere in the city. Uber and Lyft are similar to taxis but can be a little
more expensive but users prefer the convenience and appreciate the fact that
the vehicles are usually nice and provide more room than your typical taxi
(think town car or luxury SUV).
While these companies have taken off
Chicago and state officials are cracking down on them to determine if there is
sufficient insurance coverage for passengers and other drivers. WBEZ (NPR)
radio reported last week the steps that the Illinois Senate and the city has
taken to ensure there is enough insurance coverage in case an Uber or Lyft
vehicle is involved in a car crash. Uber, Lyft and Sidecar require their
drivers to have personal auto insurance, and claim to offer excess liability
insurance of $1 million per incident, but have declined to share copies of that
policy with WBEZ and others. The problem, said witnesses at the hearing, is
that the excess policies are not triggered until a driver’s personal insurance
is exhausted — and personal insurance policies explicitly preclude coverage
for commercial use of a vehicle. Sandoval noted that Lyft and Uber
recently changed their policies to “drop down” to serve as primary insurance in
case a driver’s personal policy declines to cover damages from an accident. But
insurance industry representatives said they could not verify if that covers
the insurance gap without seeing copies of the policy. They also noted other
problems with the excess policies, namely the companies’ stipulation that the
coverage applies only when a driver has accepted a fare, until that ride has
ended.
Well, the pressure from subpoenas by
the city and the Senate Committee hearing last week has apparently forced these
companies to act quickly. Uber announced late last week that their insurance
will now cover their drivers when they are out and about searching for
fares. Travis Kalanick, CEO of Uber, held a conference call with reporters
to discuss an extension of its coverage to periods when drivers may be looking
for passengers. “What we’re announcing today is that for the period of
time between trips, when the app is open and the driver is essentially
available for requests, we are announcing that we are rolling out coverage for
Uber partners on uberX nationwide, and that coverage starts today,” said
Kalanick.
City and state legislatures often
receive a lot of criticism for the work they do (or don’t do), but in this case
I think they deserve kudos for focusing hard on this issue. If they had not
issued subpoenas or called for answers then I don’t believe Uber would have
expanded their insurance coverage. This means that if a passenger is hurt in an
Uber or Lyft vehicle, there will be a lot more insurance coverage (one million vs.
$50,000/$100,000) and those other drivers or pedestrians who are injured while
the driver is searching for fares will also be covered. It’s not clear at this
point if Lyft has expanded their coverage like Uber has. I will be interested
to find out.***
***Edit. CBS News in San Francisco (where both companies are based) reported that Lyft is also expanding its’ insurance coverage during the period that where drivers are seeking fares.
If you or someone you love has been
involved in a Chicago car accident or Chicago truck accident, then call Chicago personal injury attorney, Aaron Bryant, at 312-588-3384 for a free legal consultation.