When my husband I decided to start a business, we didn't think about the legal aspects of doing so. We didn't realize that purchasing business insurance, getting building permits and making investments all required some type of legal advice. But after speaking to a close friend, who also happens to own a small business, we contacted a business attorney. Now, we have the legal smarts to make the best decisions for our business, as well as the legal representation in case something happens to our company. I hope that you find my blog helpful and informative for your own business. It's a great resource for finding the legal advice, resources and guidance you need to get your company up and running.
The crowdsource economy has taken another leap forward with the rise of consumer-driven ridesharing services. While ridesharing companies provide alternative ways for people to get to their desired destinations, this type of service is not without its drawbacks. A troublesome issue that has been brought to light is that many of the people who work for ridesharing companies as independent contractors are not adequately insured, which can expose customers to significant financial losses if there is an accident. Here's more information about this issue.
The Underinsurance Issue
There are actually two areas of concern when it comes to using ridesharing contractors. The first is underinsured drivers.
The majority of states require people who use their vehicles for business purposes to obtain commercial insurance. However, a Buzzfeed article written in December 2014 uncovered that at least one ridesharing company was advising contractors to stick with personal insurance policies rather than switching to commercial ones.
The obvious reason for this is commercial policies are far more expensive than personal policies because of higher coverage limits, the increased risk of accidents, and the likelihood of higher levels of damages associated with commercial vehicles. The price of commercial insurance would force ridesharing companies to increase prices to help contractors cover their costs, and one of the draws of ridesharing services is how relatively inexpensive it is.
Advising contractors to use personal policies, though, is not a good idea. Not only do personal policies tend to have lower coverage limits, they also do not cover commercial use of vehicles. Insurance companies will most likely decline to cover claims to personal policies stemming from accidents that occurred while drivers were hauling customers around town.
Some ridesharing companies provide secondary insurance that also covers drivers and passengers, but these policies are still problematic. The coverage limits may not be enough to cover all the losses sustained by the parties involved in the accident. For instance, one company provides $1 million in liability coverage per incident. If there is an accident involving 3 people, that's a little less than $35,000 per person, which may be woefully inadequate if those people sustain serious injuries requiring comprehensive medical care.
Additionally, the policy may some of the insurance plans these ridesharing companies have do not cover drivers when they are on their way to pick up customers. So if the person gets into an accident during that time, a claim would have to be submitted to the driver's own insurance and, as noted previously, no payment may be forthcoming if the policy is a personal one.
The Distracted Driver
A second issue that has many people concerned is one of distracted driving. According to an article on ET Auto, contractors for some ridesharing companies receive messages on their telephones when there is a fare available. Drivers must respond within a very short period of time or risk losing the opportunity.
As you can imagine, this increases the risk of an accident if the person is driving and a message comes through on his or her phone. About 421,000 people were injured and 3,328 people were killed in accidents involving distracted driving in 2012. Drivers take their eyes off the road for an average of 5 seconds when texting, which is more than enough time to–at minimum–rear end another vehicle.
While ridesharing services are a great way to secure transportation when other options are not available or too expensive, using them is not without risk. If the person you're riding with does get into an accident, establishing liability for your injuries may be a challenging issue. It's essential that you speak to a personal injury attorney as soon as possible after the incident so the lawyer can help you untangle the issues and ensure you obtain compensation for your injuries and losses.