Uber ride-sharing service upgrades insurance coverage
SACRAMENTO — Ride-sharing company Uber is upping the ante in its drive to persuade government regulators that the public is protected when its drivers are between fares.
Uber announced Friday that it was closing a so-called insurance gap in its service.
The company has been insuring its drivers when carrying Uber passengers. Now it says it is providing contingency insurance that covers property damage and injuries caused by an Uber driver even when he or she is between fares.
The loophole was publicly identified in a recent report by the California Department of Insurance. It became an issue last New Year’s Eve when an Uber driver, while not carrying a passenger, struck and killed a 6-year-old girl as she crossed a San Francisco street with her family.
According to initial reports, Uber distanced itself from the accident, emphasizing that the driver was not covered by Uber’s liability policy because he did not have a passenger at the time.
Previously, Uber and other ride-sharing companies, such as Lyft, provided $1 million of liability coverage for damages that exceed a driver’s personal insurance limits. However, it applied only when a passenger was in the car or when a driver had accepted a request for a ride via a smartphone application.
Now, Uber says it’s the first in the country to provide coverage when a driver is between passengers and hasn’t accepted a new ride request. The new policy will provide drivers with liability coverage that meets or exceeds the legal requirements of all states. The new insurance deals with any damage and injuries not under the driver’s personal policy, Uber said.
“We want to be sure that drivers can feel confident getting in cars and working with Uber, and they have coverage in the time between trips,” said Uber Chief Executive Travis Kalanick.
Lyft also said it soon plans to offer similar insurance coverage on a state-by-state basis.
Both companies said that the expanded coverage was aimed at addressing the concerns of state and local transportation regulators and answering criticism from the taxi industry.
The expanded insurance coverage is “an incremental move in the right direction,” said Bill Rouse, general manager of Yellow Cab of Los Angeles.
“But,” he added, “it does not get us all the way to the requirements of California law and common sense safety protections.”
Ride-sharing drivers should be required to have the same commercial automobile insurance policies that taxis are required to buy, Rouse said.
Insurers also called it positive that ride-share companies “are acknowledging the insurance gaps.” Nevertheless, the Assn. of California Insurance Companies, a trade group in Sacramento, cautioned that a ride-sharing driver’s personal policy generally is not valid when any paying passenger is in the car.
Twitter: @marclifsher
