Technology affords us a multitude of choices literally at our finger tips. Our smart phones open up access to countless apps from which we can conduct personal and professional transactions while listening to our favorite music all the while with a camera at the ready. Making a call is no longer the most oft used function.
So, need a ride? This ever-changing handheld techno landscape includes the emergence of ridesharing, a popular evolution in getting around town commonly known as ‘Uber.’ Like other brand names that have become synonymous with their product, ridesharing companies like Uber, Lyft, Sidecar, Wingz, and Summon, are actually Transportation Network Companies (hereafter TNC). While many find using a TNC a convenient and often less expensive option to the more conventional taxi and other car services, it does raise some serious concerns especially for the owner and/or operator.
A quick look at some of the TNC websites shows the focus to be on the ease of doing business while touting your earning power and being your own boss. In many cases, all you to need to become a driver is a 4-door vehicle, ordinary valid license, clean driving record and personal auto insurance.
Delivering pizza or people for a fee is livery. Read your personal automobile policy paying close attention to the limitations and exclusions. An important distinction is TNC versus carpooling. Carpooling is the sharing of commuting expenses such as gas, tolls, and parking fees without financial gain while TNC services are for profit. The exclusion you will most likely find is similar to: We do not cover any person for damages arising out of the ownership, maintenance or operation of a vehicle while it is being use to carry people or property for a fee. This means NO coverage and NO defense cost potentially leaving your assets exposed.
To date, there is no industry regulatory authority for TNC. Discussions among industry members and legislators seemingly center on rates and territorial rights. What doesn’t seem to be discussed is the frightening statistic that historically the taxi and limousine industry has one of the higher workplace fatality rates. The protections or possible lack thereof for the owner/operator and passenger need to be fully understood.
Greater mileage clearly increases the risk of an accident and yes it can absolutely happen to you. Do you feel you have received adequate training as a driver to handle adverse and potentially dangerous situations? While some may look at this as a fun sideline, it is a serious business which can severely impact everyone involved should something go terribly wrong.
Being a TNC or delivery owner/driver may be an interesting way to supplement income but like all business ventures, it comes with a cost. In addition to membership and other fees, it also means the purchasing of a commercial automobile policy. More time on the road means your chances increase for getting a ticket. Whether going to the movies or on the job, tickets affect your personal auto premium and availability. Are you budgeting for more frequent maintenance and ultimately a new car due to the increased wear and tear on your vehicle?
Switching sides, now you are a TNC passenger and involved in an accident. Uber, Sidecar, Wingz, and Summon sites say they maintain a $1,000,000 liability policy. Lyft’s says the same except in New York. The harsh reality is $1,000,000 does not go very far especially if there is permanent injury resulting in the need for lifetime care, durable medical equipment or in the event of the unthinkable, death. Policy language and state regulations can differ, but the fact is you may not have any recourse through your own insurance including no Medical Payments or Personal Injury Protection (PIP) coverage. Passengers need to think about their protections and rights as well.
Saving a few dollars or augmenting your income can be very attractive. However, before entering into any relationship with a TNC or delivery company, we strongly urge you to consult financial and legal advisors to fully understand all the risks including the liability exposures, insurance impact, tax implications and any other ramifications. And lastly, always remember to leave enough time to get to the airport.
Any questions regarding the above? Contact Sherry Stein at SteinSS@ecsinsure.com .