SUGARMAN presents its first installment of “Massachusetts Ride-Share Liability,” a blog series navigating the liability implications posed by ride-share companies when involved in an accident causing personal injuries.
In early 2014, questions surrounding liability and insurance coverage of ride-share companies first emerged when an UberX driver struck an entire family crossing the street and killed a 6-year-old girl in San Francisco. While liability of ride-share companies may, at first glance, appear to be rather straightforward, unfortunately, it’s not that simple. So, what happens when an individual has been injured in an accident involving a ride-share company in Massachusetts?
Under the Massachusetts personal auto policy, all registered vehicles are required to carry compulsory bodily injury coverage in the amount of $20,000 per person/$40,000 per accident, with the opportunity to purchase optional bodily injury in the same amounts and higher. This compulsory coverage is available only to individuals that are not occupants of the insured vehicle. A large segment of ride-share drivers–such as those for UberX, Lyft, and Sidecar–utilize their own personal vehicles when chauffeuring ride-share passengers, but fail to disclose their commercial activities (driving for profit) to their respective insurers. When an insurer learns of this, usually after an accident has occurred, the insurer will disclaim all optional coverage, leaving only compulsory coverage available to all non-occupants of the insured vehicle. Consequently, there is no coverage available under the ride-share driver’s auto policy for ride-share passengers injured during a ride-share trip.
According to their websites, from the moment a driver accepts a trip request to its conclusion, Uber, Lyft, and Sidecar will provide $1 million in liability coverage, including uninsured and underinsured coverage. This coverage is available to injured ride-share passengers, other drivers, and pedestrians alike, as long as the ride-share app is on and the driver has passengers. When compared with most Boston taxi cab companies, which for the most part (but not always) carry the minimum in bodily injury coverage ($20,000 per person/$40,000 per accident), the $1 million in liability coverage available is unequivocally more sufficient, especially in instances of catastrophic injuries or death. What about situations where a ride-share driver is available but has not yet accepted a trip request/has no passengers?
This has become known as the ride-share “insurance gap,” which first caught the public’s attention in early 2014, after the tragic accident in San Francisco. The family of the 6-year-old girl filed a wrongful death lawsuit against Uber, which denied liability on the basis that the UberX driver, although available, did not have any passengers at the time of the accident, amongst other reasons. As public outcry ensued, Uber was prompted to change its policy in a move to eliminate this “insurance gap” uncertainty, and other ride-share companies followed suit. Since that time, both Uber and Lyft claim that their drivers are covered by bodily injury coverage from the moment that a driver turns on the app and is available for a trip request. Uber and Lyft will provide contingent bodily injury coverage in the amount of $50,000 per person/$100,000 per accident if/when its driver’s personal auto policy does not provide coverage. Yet, unlike Uber and Lyft, Sidecar does not provide any type of pre-ride availability-type contingent bodily injury coverage.
Recently, Governor Charlie Baker proposed a bill that would create statutory standards to govern ride-share companies, which are referred as “Transportation Network Companies” (TNCs). If passed, the proposed law would require that all TNC drivers carry the standard minimum automobile bodily injury coverage, effective when a TNC driver is available but before accepting a trip request. Upon accepting a trip request, a TNC driver then would be required to carry $1 million in liability insurance. The bill would bring all TNCs within the regulatory authority of the Commonwealth, and would subject TNC drivers to more stringent background and eligibility requirements. The proposed legislation will likely draw heavy opposition from its primary competitor, the taxi cab system, and the current insurance framework (as described below) will remain in place until the bill is passed.
As the popularity of ride-share companies continues to increase, it is important for users, drivers, and pedestrians to know about their rights should they be involved in an accident involving a ride-share company. SUGARMAN has extensive experience litigating motor vehicle accidents involving motorists and pedestrians on behalf of those who have been injured. If you have been hurt in an accident and wish to speak to one of our attorneys regarding liability, please fill out a Contact Form, call us at 617-542-1000 or e-mail firstname.lastname@example.org.