Last month, California voters passed a costly and controversial ballot measure to exempt companies like Uber and Lyft from having to classify their gig workers as employees rather than independent contractors.
Prop 22, also known as the App-Based Drivers as Contractors and Labor Policies Initiative, was backed by more than $200 million from gig-based companies like Uber, Lyft, DoorDash, Instacart, and Postmates. The Prop 22 initiative is a direct challenge to a new law, the Assembly Bill 5, which went into effect on January 1, 2020. The AB-5 bill, popularly known as the “gig worker bill, requires companies that hire independent contractors to reclassify them as employees.
Uber and Lyft strongly opposed the AB-5 bill, which entitled their drivers to workers comp, unemployment, paid sick and family leave, and health insurance, among other employee benefits. The ballot initiative Prop 22 declared that app-based drivers were to remain classified as independent contractors, not employees, which provided certain freedoms that independent drivers were originally drawn to. Prop 22 primarily affects employee benefits and has not yet defined rules regarding Rideshare auto accidents.
How is Insurance coverage and liability defined in an Uber or Lyft Rideshare accident?
Uber and Lyft consider their drivers as independent contractors, which can make it difficult to determine liability if an auto accident occurs. California has defined 3 different periods during a rideshare driver’s shift that differentiates when the company’s insurance coverage kicks in and when the driver’s personal insurance is used
When a rideshare driver is not logged onto their app, they are not considered to be working. Therefore, they are not covered by their commercial insurance. Any accidents that they may be involved in would be covered by their personal insurance.
Period 1 is for when an active driver is logged on to their app and is actively waiting for a passenger, but is not on the way to a passenger, or having a passenger in the car. The rideshare company must provide liability coverage of $200,000 for its driver. This results in up to $100,000 in death/personal liability coverage per incident and up to $50,000 per person.
This is when the driver has agreed to a request but is on their way to pick up the passenger. The commercial insurance coverage of up to $1 million kicks in whether the driver is insured or uninsured on their own personal insurance policy.
Period 3 occurs the moment the passenger gets inside of the driver’s vehicle. At this time, Uber and Lyft companies also provide $1 million in coverage, whether the driver is insured or not under a personal insurance company.
It is important to contact a Uber or Lyft Accident Attorney immediately after your accident. Rideshare companies and their insurance providers are more interested in saving money than offering fair compensation. For this reason, working with an aggressive and experienced rideshare accident lawyer can help you to get the compensation you deserve.
If you have been injured in an Uber or Lyft accident, contact an experienced rideshare attorney at B&D Law Group immediately.
Attorney Michael Geoola explains the role insurance plays in rideshare accidents and collisions. Click below to watch him on KGET Studio 17 Bakersfield with Vanessa Dillon.