Whether or not you require Lyft and Uber auto insurance in Oregon was one of the most hotly debated issues in the 2005 Oregon Legislative Session. Not one but two bills were introduced on this contentious issue. A coalition of cab companies is backing House Bill 2995. House Bills 2995 and 2237 are being backed by the insurance industry. Both bills were still in committee on July 6, 2015, when the legislative session adjourned, and will be picked back up in the next session.
What is Uber?
Uber is a very popular ride sharing program. In fact, according to KATU, there were more Uber cars transporting people this year than taxi cabs in Portland: approximately five hundred Uber cars to about 460 taxi cabs. Passengers love the convenience and the lower cost of Uber, while drivers love the opportunity to earn money and set their own hours. Most Uber drivers work part-time but some make a full-time living with it.
Uber works via an internet based cell phone app that allows people to request a ride and Uber drivers to see who needs a ride. Uber provides the internet platform for these connections to take place but does not hire drivers i.e. drivers are not actually employees of Uber. Furthermore, Uber drivers are not contract workers in the traditional sense of the word as they are “on call” only when they choose to be and they can flip this on and off as they desire. This new business model makes for a complicated situation when it comes to who should carry the insurance and exactly when a policy covers an Uber driver.
Should Uber carry insurance when the driver is acting through the Uber network or should the driver?
From a personal injury standpoint, it becomes even more complicated. Who is responsible for damages should a driver cause an accident while on the way to pick up a passenger who has requested an Uber ride? Whose insurance should cover the medical bills should a passenger get injured in an accident while being transported? Whose insurance should pay for property damage if the driver runs into another vehicle while on his or her way to pick up a passenger or when just driving around with the app on but with no ride request or no passenger? What if the Uber driver hits a pedestrian right after dropping off an Uber passenger? Who is responsible then and whose insurance should pay for this?
Actual Case of Uber Insurance Problems
To put the questions above into perspective, consider this real world example that actually happened on New Year’s Eve, 2013, in San Francisco. An Uber driver accidentally hit and killed a six year old girl when she was crossing the street. When the little girl’s family sued Uber for damages, the fact that the Uber driver was not transporting an Uber passenger at the time, nor was he on his way to pick up a specific passenger complicated proceedings. However, he had activated the Uber app on his cell phone and was logged in and actively searching for people who had requested a ride through the Uber platform. Uber argued they were not liable since the Uber driver was not transporting an Uber passenger at the time. Uber’s insurance also does not currently cover damage to the Uber car when the app is on and an Uber driver causes the accident. However, neither does the regular insurance.
How Does Ride Share Insurance Help?
In these types of cases, “ride share insurance” would cover these types of damages. However, while some insurance companies actually offer extra coverage for drivers that participate in ride sharing, other insurance companies will automatically drop a driver’s insurance if they discover he or she participates in this type of ride sharing activity. Of course, drivers protest over this, as does Uber. There is currently no ride share insurance available in Oregon, although Metromile does provide it in Washington State.
The language of House Bill 2995 specifically gives insurance companies the right to exclude insurance coverage for any drivers who operate a vehicle in connection with transportation network companies. What will this do to the insurance marketplace in Oregon? Will personal insurance skyrocket for those who participate in Uber and other programs like it? Commercial insurance is about ten times higher than personal coverage and Uber claims it cannot operate if part time drivers require commercial insurance. Obviously, Personal Injury Protection (PIP) insurance for passengers, which covers medical bills right away, and ride share insurance for the driver are a positive step since accidents do happen no matter how careful a driver is. So, what else do these ride share insurance bills do?
Both of the “Uber bills” require Uber, Lyft and other transportation network companies to carry insurance for all their drivers who use their network. This would include insurance for those times when they are on their way to pick up a passenger and any time they are logged into the network searching for riders to collect. The terms of coverage do vary somewhat between the two bills and, as such, the actual details are still in flux.
It was reported in the news that a compromise may have been reached between proponents and opponents to House Bill 2995. If this is true and is voted into law, a minimum insurance coverage of $50,000 per person for death or injury would be required ($100,000 per incident). Property damage would require a minimum of $25,000 . The current Oregon requirement for personal injury insurance for uninsured and under-insured drivers would also be required of drivers participating in Uber and other transportation network companies.
House Bill 2237 requires that Uber and other transportation network companies provide proof of this insurance to the driver before he or she starts working with their platform. Furthermore, it requires that drivers carry a copy of this proof in the vehicle they are using to transport passengers at all times. It would also require electronic recording of the date, time, place of pickup, final destination, and miles covered. Damages or injuries arising while the driver participates in the transportation network would also need to be logged.
Uber has been sending out emails to people who have used their service asking them to contact their legislators and ask them to oppose House Bill 2995 and House Bill 2237. Many believe it would be the end of Uber operating in Oregon if either of these bills pass.
The issue of Uber auto insurance in Oregon is a complicated one and it will be helpful for representatives to hear what the majority of consumers actually want. In my opinion, PIP protection for ride share and taxis in Oregon is a positive step, ride share is a good thing and insurance laws that help ride share facilities to stay in Oregon, with a reasonable amount of coverage for passengers and drivers, is what we need.
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