The Risks of Ridesharing

Young adult man with coffee, holding out cell or mobile phone with rideshare app open

(UPDATED: August 4, 2017) Rideshare programs have been gaining in popularity in many urban areas across the country in recent years. An alternative to traditional taxi services, they offer certain transportation conveniences such as requesting rides through a tap of a button on a smartphone and paying in advance with a credit card. However, you need to know the risks of ridesharing and its special legal considerations for drivers, passengers, and rideshare companies themselves, especially when it comes to regulations, or the lack thereof.

Unlike taxis, which are regulated by the city and must follow strict guidelines, up until recently, rideshare programs have largely functioned on their own, without adhering to the same strict regulations. This is beginning to change, as legal concerns have grown. In California, the state’s Public Utilities Commission established a new category of business specifically for rideshare operations, which allows for regulation. In Illinois, a new set of rules was recently passed by the state House, which would place stricter regulations on rideshare. Under the new guidelines, drivers in rideshare programs would be required to undergo licensing if they drive over 18 hours per week. Other regulations include mandatory background checks and examination of vehicles to ensure safety. Commercial insurance coverage would also be required.

3 Forms of Ridesharing Programs

The major forms of rideshare programs can be broken down into three different types.

  1. Professional Drivers: There are those with professional drivers, such as Uber (sometimes called Uber Black). Considered the premium choice, this is the more expensive route of ridesharing but features stricter regulations, such as required driver background checks, higher levels of liability insurance, and routine car inspection.
  2. Non-Professional Drivers: The second type of rideshare utilizes non-professional drivers, and includes UberX, Lyft, Sidecar, and Carshare. This is often considered the most cost-conscious form of rideshare. Base rates vary from one company to another but are generally lower than those of taxis. Vehicles are privately owned. For some companies, such as Sidecar, drivers name their own prices and customers can select rides based on this information.
  3. Self-Operating Vehicles: The third form of rideshare allows the user to be the driver (this includes companies such as Zipcar and—for bicycle riders—Divvy). For Zipcar, users can apply online and receive a card in the mail which will allow them to reserve and obtain cars in the network. To apply, you must have a valid driver’s license, and meet age and driving record requirements. Zipcar members are covered by the company’s insurance as long as they are in good standing. For Divvy, customers may purchase short-term passes from kiosks at bike rental docks throughout the city, or they can invest in annual memberships for $75. The only requirements are that you are age 16 or older, and have a credit or debit card. The Divvy website notes that “the bike remains your responsibility until it has been properly locked at a dock, or handed over to a Divvy representative.”

While all these forms of rideshare offer unique benefits, it is important to be mindful of legal considerations such as underinsured drivers and accident liability. One concern is whether the liability insurance carried by rideshare companies would cover injuries sustained by their drivers and passengers if a rideshare car is struck by another driver who is uninsured, or who lacks adequate insurance. In addition, drivers may be in danger of invalidating their personal auto insurance policies if they transport rideshare passengers. See our blog highlighting the risks and rewards of ridesharing.

If you or a loved one has been injured in an accident involving a rideshare vehicle, contact Cooney & Conway today to discuss your legal options with one of our experienced attorneys.