Miami is one of the latest cities to be targeted by the controversial ride-sharing services of Lyft and UberX. Using smartphone apps, the companies connect drivers with riders via the Internet.
The taxi industry is mounting strong objections to the new services. In Miami, licensed taxi drivers have called on Miami-Dade County Commissioners to jail drivers who have been hired by the rideshare services. The City has already levied fines, conducted undercover sting operations, and impounded vehicles of Lyft drivers, according to a recent Miami Herald article.
Uber has a big war chest to withstand legal challenges. The company recently raised $1.2 billion in new funding, giving it a valuation of $18 billion. Started as a luxury car service in 2009, the company later rolled out the UberX low-cost service featuring non-professional drivers who use their personal cars.
Many questions about insurance coverage cloud the controversy, including the items outlined below.
- The transporting of people or goods for hire is normally excluded under a personal auto policy.
- Rideshare drivers who operate a personal auto covered by a consumer auto policy run the risk of being denied coverage in the event of an accident. In a tragic New Year’s Eve accident, for example, an Uber driver struck and killed a 6-year old pedestrian.
- Passengers and third parties that sustain personal injury or property damage may not have access to full insurance benefits when an accident involves a rideshare driver operating a private auto under a personal auto policy.
- If the rideshare driver fails to inform the insurance carrier of livery-related usage of their private auto, the carrier may attempt to void the policy for misrepresentation.
- Private vehicle insurance coverage for a blended use of personal and commercial applications is not a standard industry practice, meaning that states and courts have not had a chance to consider and test all the legal implications.
Uber now operates in 128 cities across 37 countries, according to Reuters. Competitors include Lyft, Sidecar, Flywheel, and Hailo. Some services use mobile apps to hail a licensed taxi, while others rely on private individuals as drivers.