Ride-sharing has been popular for several years, but is just now moving into smaller towns and communities.  More and more are beginning to ask what is ride-sharing?  Do I have coverage if I decide to become a TNC driver?  What are the coverage gaps?

What is ride-sharing?

The official name of a ride-sharing business is a Transportation Network Company (TNC).  TNC's use mobile apps to connect passengers with drivers.  Anyone can sign up to be a driver if you are approved by the TNC.  The most popular TNC's are Uber and Lyft.  Drivers are not required to have background checks or commercial insurance coverage like taxi service's.

Do I have coverage to drive?

Personal auto policies were not designed, underwritten or priced for commercial ride-sharing.  Most personal auto policies specifically exclude coverage for vehicles that are used for commercial activities like pizza delivery or use as a taxi.  In short, you have coverage when you are engaged in normal personal driving activities but the moment you turn your app "on" to wait for a passenger, your personal auto policy will not provide coverage.

What are the coverage gaps?

There are three separate "periods" that a personal auto policy will NOT cover, and they are:

Period 1:  When the TNC driver turns "on" the app but is not matched with a passenger

Period 2: When the TNC driver has made, and accepted, a match with a prospective passenger but that passenger is not yet physically in the vehicle

Period 3: When the TNC driver has picked up the passenger and the passenger is occupying the TNC driver's vehicle

While some of the TNC companies are providing coverage for Period 2 & 3, most do not cover Period 1.  This insurance gap became a huge issue in late 2013 when an Uber driver hit and killed a 6-year old girl in San Francisco.  Uber denied liability because the driver didn't have a passenger in the vehicle.  The driver did not have enough personal coverage (he was carrying CA state minimum bodily injury coverage of $30,000) to cover the damages.  The family then sued both Uber and the driver.

It is Hummel Group's recommendation to purchase a commercial auto policy for livery service, to ensure you have coverage for all three of the above periods listed.  Feel free to contact one of our Business Risk Advisors or Personal Risk Advisors for more guidance if you are considering driving for a TNC.

Contact Hummel Group for more information by calling 800.860.1060 or click the link below.