In the new world of the sharing economy, companies such as
The ride-sharing companies offer smartphone apps that enable freelance drivers to provide rides for a fee, which they split with the company. They're regulated by the state Public Utilities Commission, whose requirements include a mandate to carry liability insurance to supplement drivers' policies.
The driver's status affects more than just his liability. As the state Department of Insurance recently warned, the policies held by many drivers won't cover accidents that happen when they're providing rides for pay. It's not clear where insurers will draw the line between commercial and noncommercial activity; as the accident in San Francisco illustrates, the line is blurry, and it will only become blurrier as more people sign up to be occasional drivers for these services.
Worse, the insurance coverage mandated by the PUC doesn't require ride-sharing companies to insure against collision damage to the driver's vehicle, injuries to the driver or losses caused when the car is hit by an underinsured motorist. Lyft announced Wednesday that it was adding coverage for underinsured motorists and for collisions but not for injuries to drivers — that will have to come from drivers' health insurance, assuming they carry it. Uber also offers coverage for underinsured motorists. But the companies are doing so at their discretion, which means they can drop the coverage at any point.