Three trendy car-summoning services — Uber, Lyft and Sidecar — are moving to expand their insurance policies for drivers to help plug potential holes in coverage during periods when drivers are not providing rides.
Uber said Friday that it was expanding coverage immediately, following questions that have been raised over an "insurance gap" during the time when its ridesharing drivers are not giving a ride, but are waiting to provide one. Lyft, a rival service, announced a similar expansion on Thursday.
Sidecar, meanwhile, said on Friday that it was planning to provide coverage to drivers when they are live on the system but may not have a passenger in the car. "We plan to roll out this coverage soon," a spokeswoman said, following Uber and Lyft's announcements. The company has been working with its insurance carriers over the past few months to make the changes, the spokeswoman said.
The changes come following an incident late last year when an Uber driver who was in between rides struck and killed a 6-year-old girl in San Francisco. The parents sued Uber, arguing that the very nature of the company's app, which displays a map on a smartphone, is unsafe.
The bottom line, Uber CEO Travis Kalanick said in the company's announcement, is that the drivers who use its app should have the confidence that any potential insurance gap is covered with a safety net, "as governments and insurance companies work out the details of ridesharing in their cities and states."
When Uber launched in 2010, insurance was a lesser issue, because the company partnered with professional town car services offering their own commercial insurance. But as Uber has since opened up its driving program to ordinary citizens through UberX, and other ridesharing companies like Lyft and Sidecar have launched, questions over safety, regulations and insurance have loomed large.
People's own personal insurance policies could differ wildly in whether they provide coverage while people give rides for an Uber- or Lyft-like service. Because the apps' drivers are being compensated by the companies, and due to the increased liability, personal insurance policies may not apply during the trips.
Uber, Lyft and Sidecar already offer their own liability insurance policies covering up to US$1 million in damage during rides. Now, if a person's personal insurance would not cover an accident during the "gap" period, Uber's would kick in at up to $100,000 for total bodily injury, the company said. The new coverage would take effect starting Friday, in every state in which Uber is active.
Uber's Kalanick said the company's hope is that by making its expanded coverage available immediately, insurers and legislative groups will have time to think about how to look at ridesharing services going forward.
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