UberX has been functioning legally in NYC since April 26, 2013. However, It and other "ridesharing" companies have
come under increasing scrutiny throughout the United States. Following are a number of issues involving ridesharing companies
that illustrate the great degree of concern maintained by jurisdictions concerning the safety and efficacy of the ridesharing industry. - Editor

MORE MYTH THAN MATH: UBER DECEIVES DRIVERS WITH ITS ROSY INCOME PICTURE

June 4, 2014

ROCKVILLE, Md.— Uber made headlines this week with grossly misleading statements about how much their uberX drivers can make. The ‘Who’s Driving You?’ campaign breaks it down here:

• Uber claims the median income for an uberX driver in San Francisco is $74,000. That assumes the driver works “at least” 40 hours a week. It’s probably 60 hours a week.
  
  
• A typical taxi driver puts 50,000 miles a year on the vehicle. Using the government rate of 56 cents per mile to reimburse for mileage, gas, maintenance, and wear and tear on a car, those 50,000 miles a year will cost an uberX driver $28,000.
  
  
• In addition, there is insurance. If uberX drivers want to avoid losing their life savings in an accident, they need to get primary commercial automobile liability insurance coverage. It will cost around $5,000 per year more than regular
  car insurance.
  
  
• Taxicab drivers also incur a variety of other costs such as tolls, parking, carwashes, etc. which account for another $3,000 per year.
  

So, now that income is actually not $74,000, but $38,000. At 60 hours per week for 50 weeks, that’s $12.67 per hour. At 40 hours per week it’s $19.00 per hour with no benefits at all.

After three years, that car, if new, which most aren’t, would now have 150,000 miles on it rendering it practically worthless for resale or trade. That means the driver would have to buy a new car even before the old one is paid off.

“We know where this road ends,” said Dave Sutton, spokesperson for the ‘Who’s Driving You?’ campaign. “It ends with Uber getting rich without taking any responsibility while its drivers wreck their cars and accept all the risk. Uber’s like a casino: The house always wins.”

Uber Continues to Speed Away From Responsibility

Assaults, Kidnapping and Death Continue to Point To Massive Insurance Gaps for Uber and Lyft

Charges of assaults, a kidnapping and the death of a child continue to draw attention to the so called “ridesharing” industries' claims that it is not responsible when things
go wrong.

In the latest string of problems, police have charged an Uber driver with kidnapping an inebriated woman and taking her to a motel for the night. News reports say a valet at a bar hailed an Uber driver to take her home. Uber, however, says it has no record of the transaction and quickly distanced itself from the incident stating it is “certainly not clear that this is an Uber related incident.”

The news broke as two other incidents placed Uber on the defensive. One was in Oklahoma City, where a passenger is suing an Uber driver for punching him in the face and sustaining injuries that will require dental surgery. In another, an uberX driver with a 2009 felony conviction and pending 2012 felony charge was charged in San Francisco with battery for allegedly hitting a passenger.

These incidents and more are also likely to draw more scrutiny about lax background checks since neither Uber nor Lyft run their drivers through fingerprinting and police or FBI databases as required for the vast majority of taxicab drivers. Uber and Lyft, as unlicensed transportation companies in most communities, are unable to even access those public safety databases in the first place, relying instead on cheaper, less effective computer searches.

“This is where transportation and insurance officials need to take note,” said Dave Sutton, spokesperson of the national ‘Who’s Driving You?’ campaign aimed at drawing attention to the serious safety and responsibility problems with companies such as Uber and Lyft. “An Uber driver, supposedly vetted by Uber, provides a ride and Uber says it isn’t sure it bears responsibility. This puts the issue of Uber’s paper thin insurance guarantees and background checks squarely in conflict with its claims that it values safety.”

The licensed, professional taxi and limousine industry ensures that its drivers and the vehicles they operate are covered 100 percent of the time by primary commercial automobile liability insurance. Uber and Lyft are seeking a bill in California that would allow them to turn their insurance on when a driver has his app open, and off when it is closed.

“App-on, App-off insurance simply is not good enough,” Sutton said. “What happens in the growing number of cases when an Uber or Lyft driver is flagged down on the street by a passenger paying cash? Or what happens to this woman who accepted an Uber ride, even though it may have been arranged by someone else?

The multi-billion dollar ridesharing industry is driving its vehicles full speed through its massive insurance gaps, avoiding its responsibility in favor of profits.”Fifteen states plus the District of Columbia have now issued insurance warnings about “ridesharing.” San Francisco’s district attorney this week called for tougher guidelines and oversight of the industry. The concerns have been raised after several high profile incidents even before the alleged kidnapping this week. One deadly case involved an uberX driver who struck and killed a child in a San Francisco crosswalk six months ago, an accident for which Uber says it is not responsible, even though the driver was on the street looking for his next uberX passenger.

‘Ridesharing’ Insurance Gaps Threaten Public Safety

Ridesharing is dangerous. Unregulated transportation app companies - known as “Transportation Network Companies” in some states and inaccurately as “ridesharing” elsewhere - contain serious insurance coverage loopholes that threaten the safety of passengers, other drivers, pedestrians and even drivers for these companies.

The most infamous insurance loophole involved a 6-year-old girl killed by an uberX driver. Although she was killed while the uberX driver was cruising the streets with the app opened while awaiting an electronic hail, Uber said her death was not the company’s responsibility and that its insurance did not cover drivers without a passenger in the vehicle. Subsequently, a Lyft spokesperson confirmed its insurance contained an identical gap.

One of the least discussed but most obvious loopholes is that simply by downloading the app, passengers must agree to hold “ridesharing” companies harmless for anything that happens on the trip. For proof, look no further than the case in which two Uber passengers suffered concussions and injuries to their backs and necks. Their combined costs for medical treatment totaled tens of thousands of dollars. When they sought financial compensation from Uber to cover these costs, the company responded this was the driver’s responsibility.

Uber and Lyft recently announced expanded liability insurance that covers passengers while the driver has the app open. The company’s new collision coverage tops out at significantly less than that of the typical for-hire vehicle.

Here’s something no one is talking about: Suppose you are an uberX or Lyft driver and you strike a pedestrian while you have the app open. Quick crucial decision: Do you close the “ridesharing” app and risk losing your personal insurance or do you keep the app open and risk losing your job?

Your personal insurance carrier will cancel your policy if they discover you’ve been driving commercially but first they have to find out. Meanwhile, uberX or Lyft will almost certainly “deactivate” you if you cause a costly accident. Most drivers would rather take their chances with losing their private insurance than almost certainly lose their job. Public officials are already taking notice of this looming insurance fraud.

Additionally, Uber and Lyft’s new “app open” insurance coverage would make coverage “activity based.” This is terrible public policy that should never be institutionalized. Here’s why: Say a ridesharing driver causes an accident while driving with multiple apps open simultaneously. Which company’s insurance will be held accountable? Consider also that technology may someday soon aggregate “ridesharing” companies’ electronic hails for drivers in a manner similar to that of Kayak.com. This additional layer of technology could cause “ridesharing” companies to disavow responsibility.

The possibilities for confusion and lack of accountability are endless. The solution is that commercial insurance should always be tied to the vehicle, not to the driver’s activities, and should cover the vehicle 100 percent of the time just as it is currently required to do for all other for-hire vehicles, limousines and taxicabs.

Personal auto policies do not allow drivers to use their vehicles commercially including using the vehicle to ferry paying passengers around town. Consumer Reports recently warned: “Don't risk your car insurance by operating your vehicle as a part time taxi.” Insurance companies have stated they will cancel the policies of drivers who use their vehicles in a commercial manner. Uber and Lyft’s announced new insurance policy still does not cover the ridesharing driver if he causes the accident. In this case, the driver would have to rely on his own health insurance to cover his medical costs.

Another looming insurance fiasco involves impromptu street hails. The ‘Who’s Driving You?’ initiative has received reports of uberX and Lyft drivers stopping to pick up passengers who pay cash for the trip. These trips are not registered in
the Uber or Lyft systems and would be entirely uncovered by any insurance.

So what are Lyft and Uber doing about this? Both companies recently announced their participation in a California based “rideshare insurance coalition” hoping to fix the dangerous insurance coverage loopholes involved in “ridesharing.” In so doing, these companies have publicly acknowledged that their services involve dangerous gaps in insurance coverage.

The only certain route to insurance safety is full time commercial auto liability insurance coverage and transparency. Until then, these companies will continue to seek record profits by shifting the substantial financial cost of commercial insurance onto passengers, drivers, innocent bystanders and local governments in the form of public safety risks to all.

ABOUT US:
‘Who’s Driving You?’ is a public safety campaign designed to educate the public about the dangers of unlicensed transportation companies. It is an initiative of the Taxicab, Limousine & Paratransit Association, an international non-profit trade association whose membership consists of 1,100 licensed transportation companies. For more information, visit www.WhosDrivingYou.org, follow us on Twitter (@WhosDrivingYou)
and follow us on Facebook (facebook.com/WhosDrivingYou)

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