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What Happens If You Get into an Accident While Driving for a Ridesharing Service?

Ridesharing services like Uber and Lyft are an increasingly popular alternative to traditional taxis. They're also becoming a significant source of income for many Americans, largely due to the freelance nature of the work. Given the amount of miles most rideshare drivers traverse each day, it's possible for even the most careful of drivers to become involved in an auto accident. If you're driving for a rideshare service, then chances are you'll want to know what could happen if you're ever involved in an accident.

What Happens to You

One of the unique challenges of working for a ridesharing service involves insurance coverage. For starters, rideshare services don't require the same stringent requirements that traditional taxi services face. This means you won't need to purchase commercial insurance, which could cost hundreds or even thousands of dollars more than a personal auto-insurance policy. However, the lack of a commercial policy can be a double-edged sword in more ways than one.

For starters, most insurance agencies frown upon drivers who maintain personal auto-insurance policies on vehicles that are being used commercially. It's not unusual for rideshare drivers to attempt a claim, only to not only have their claim rejected but also have their insurance coverage cancelled outright.

Even if your insurer somehow gives you a pass on using your personal auto-insurance policy, it may not have enough coverage to adequately cover any injuries or other damages if you're found at fault for the accident in question. This could open you up to a civil suit for the remaining amount needed to make the other party whole.

Aside from the above, what happens to you as a ridesharing service during an accident is no different from being involved as an ordinary driver. As in any other circumstance, you'll need to exchange insurance information with the other driver, refrain from admitting fault, and contact the local authorities as soon as possible.

What Happens to Your Passengers

In most cases, your passengers will be adequately covered under the ridesharing service's own insurance provisions. For instance, most ridesharing services have commercial liability and underinsured or uninsured bodily injury policies with limits of $1,000,000 or more—enough to take care of most injuries or damages that could occur during an accident.

But if your passengers have injuries that exceed those limits, they could be out of luck—unless they go after you and your insurance provider. A ridesharing service's unique outsourcing of labor could also complicate matters when it comes to recovering damages. Most companies involved in ridesharing classify their employees as independent contractors, meaning the companies can't be held responsible for the negligent or malicious actions of their third-party contractors.

This denial of liability could make it exceptionally difficult to passengers to directly sue the company and recover damages. Instead, your passengers may end up suing you or your insurance provider for medical expenses, lost wages, and other potential damages. Having an umbrella insurance policy of your own with a limit of over $1,000,000 could help soften the financial blow of a successful lawsuit, but it could also add hundreds of dollars to your current operating expenses until then.

What Happens to Others Injured By Your Vehicle

If you strike a pedestrian or a bicyclist with your vehicle while driving for a ridesharing service, your liability for the incident could depend on the following.

  • If the driver is operating his or her vehicle while off-duty at the time of the accident, the driver usually takes on the liability.
  • If the driver is operating the vehicle with fares inside or while responding to a fare, the ridesharing service may be considered liable, in many cases.

Dealing with an auto accident as a driver for a ridesharing service can be complicated and troublesome at times. For this reason, you should always talk to an attorney at a local law office if you have any questions or concerns about the accident and the potential aftermath.