Sooner or later, it's going to happen. A driver for Uber or Lyft is going to crash. People will be injured, property damaged. And then, some poor Dallasite with a neck brace and a stack of medical bills Dallas will discover just how lousy these ride-sharing apps do insurance.
That's what people are discovering right now in San Francisco, where an Uber X driver ran over a 6-year-old girl on New Year's Eve. The company, which boasts a $1 million policy to cover what a driver's insurance won't, says it isn't responsible because the driver was between fares and didn't have a passenger in the backseat.
The question of insurance for ride-sharing services has largely been glossed over in bashing of Yellow Cab for illegally cheaping out on its own coverage. But it's something that will have to be addressed, either when the Dallas City Council passes new regulations or when Uber gets taken to court.
Uber's standard line, trotted out in the recent series of public hearings at City Hall, is that it contracts with limo companies that carry commercial insurance that complies with state and local regulations.
That may be true for Uber's black-car service, but it's not for the lower-rent Uber X or Lyft. Those services only require only that drivers have basic liability insurance, the same type of policy as your average commuter has which, generally speaking, explicitly prohibits drivers from carrying passengers for pay.
We reached out to Uber and Lyft and haven't heard back. We spoke with one Uber X driver whose insurance company dropped him when he told them he planned to start driving for the service. He switched to a different company, studiously avoiding mentioning that he'd be using his car as a taxi.
"It's kinda like don't ask, don't tell with the insurance company," he says.
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What happens when he gets in a wreck and his insurance company finds out he was driving for Uber depends on the insurance company? Maybe they'll refuse to pay. Maybe they'll pay it, then cancel his policy. Whatever the case, the outcome will probably not be good for him, and history suggests that Uber and Lyft won't be eager to chip in.
There's a reason cab companies are required to carry $500,000 insurance policies, says Kelly Hollingsworth, who has long represented Dallas' smaller cab companies against Yellow Cab's near monopoly. It's to protect the public who ride in cabs or get hit by them. That Uber X and Lyft drivers are essentially operating without legit insurance policies should be a serious concern, he says.
"I thought someone would have to go some to outdo Jack Bewley and the crap he was doing on taxi cabs [and insurance]." Uber, he says, has done just that.
Send your story tips to the author, Eric Nicholson.