Wednesday, June 4, 2014

Ride Sharing?

Ride sharing is nothing new.

In Northern Virginia, you have to have three people in your car to take advantage of the "HOV" lanes.   Traffic is so bad, that people will drive over to the local 7-11 or Safeway or some other unofficial (or official) meeting place to pick up strangers to ride in their car, so they can qualify for HOV status.   The people who ride like this are called "slugs" and the places they congregate, the "slug line".

Of course, car pooling pre-dates this sort of behavior.   And provided you are not accepting money from guests in your car, you are not arguably running a "for hire" business, and those guests should be covered under your insurance policy (check with your company to be sure!).

When you accept money for carrying people, then you are "for hire" and a different insurance policy is needed.

Unofficial taxicabs have been around for a long time.  And such activities may or may not be legal in some jurisdictions.  In NYC, "Black Cars" become popular as licensed "medallion" cabs were in short supply and the "legit" cabs refused to go to certain neighborhoods (the abuses of licensed cabs in NYC are legion).  So enterprising people bought black Town Cars and created unofficial taxi businesses.   You cannot HAIL a Black Car, only call it - and apparently this is legal now in NYC.  Of course, they have to have chauffeur's licenses and carry commercial insurance for their "Black Cars".  

A company called "Uber Black" seems to be following this business model by providing an online way to match up "Black Cars" with riders.

Ride-sharing companies have proliferated in recent years, using the Internet as a model.  Like car-sharing schemes (where you rent out your car to strangers) you, as an individual, can pick up people, using your smart phone to indicate where you are going to, and get paid to take them along for the ride.   As you might imagine, the taxicab people aren't happy with this concept.

Uber X, Lyft, and Sidecar seem to be following this business model.
The risk to the driver is that no, your regular car insurance does NOT cover you, and taking passengers-for-hire may in fact be grounds for cancelling your policy.  I ran into this while delivering pizzas in college for "a major chain".  When I asked them about my insurance, they said, "Don't tell your insurance company you are delivering pizzas!"   One driver totaled his car, and the insurance company (and the pizza place) refused to pay out.   Only 36 more payments to make - while in college!

For an Uber-X driver, you could find your coverage cancelled if you are carrying passengers for hire.  Moreover, if there is an accident, you could be sued personally, as well as the Uber-X company, who provides a paltry $1M liability policy (no word on collision).   So if you have any assets, they might be forfeited, if you are sued as the result of a ride-share gone horribly wrong.

From a legal perspective, they are operating an unlicensed cab service, plain and simple.   You can all it e-this or cyber-that, but the bottom line is they are acting as a dispatcher for a fleet of unlicensed and unregulated gypsy cabs.

 By the time they get this all sorted out, we'll all be driving Google Driverless Cars anyway, right?   ;)