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Rideshare Companies: Who Is Liable for Injuries Sustained in an Accident?

Rideshare companies have become popular throughout California, but taxi drivers have contended that these transportation services are not subject to the same regulations as taxis.  Recently, the California Public Utilities Commission legalized and imposed regulations on these “Transportation Network Companies.” However, a California injury lawyer points out that the rules governing liability for an accident in one of these vehicles are still unclear, potentially leaving passengers with little recourse in the event of an accident. 


Rideshare Companies Are Legalized and Receive Regulations

Rideshares have become a popular mode of transportation in California.  Rideshare systems operate on a simple principle: a web-based application allows users to enter their current location and a request is sent out to nearby participating drivers.  A driver responds, a picture of the driver is sent to the person requiring a ride, and the driver comes to transport that person. 


There are an array of rideshare apps with different pay structures: Sidecar and Lyft allow riders to pay drivers an amount that they think is fair in the form of a donation; Uber’s fee structure is similar to that of metered taxis. 


Taxi drivers believe that these rideshare companies are unregulated modes of transportation that are cutting into their business.  Taxis are subject to emissions standards and fare limits, and local governments mandate a set fare in taxis that cannot be discounted. Rideshare companies are not subject to these same requirements and cities have struggled to determine how to treat them, explains the California injury lawyer.


In Los Angeles, many companies, including Lyft, were sent cease-and-desist orders demanding they stop operations. The California Public Utilities Commission has taken a different approach to dealing with rideshare companies: CPUC president Michael Peevey proposed a set of rules and regulations that are seen as the first step toward legitimizing these transportation systems. 


The regulations, which were passed into law last September, include insurance requirements for those offering rides, driver background checks, a driver-training program, drug tests and a zero-tolerance policy on drugs and alcohol.  The rideshare vehicles will be classified under a new legal label, Transportation Network Companies. Tech companies that advocate for rideshares believe that these new California regulations could be a model that is used nationwide to deal with rideshare systems. 


Liability after an Accident in a Rideshare Vehice


Forbes reported that, under the terms of the September ruling, Transportation Network Companies would be required to have a minimum of $1 million in insurance. However, it is unclear when this obligation must be met, and the companies that connect drivers with those seeking rides are not transportation centers; they disclaim responsibility for the rides that are being provided, according to the California injury lawyer.  


The vehicles, they claim, are not the companies’ cars but the drivers’ cars. Such factors give rise to questions concerning liability in the event of an accident. 


If a car has only personal liability insurance, then passengers who are in the rideshare vehicle might end up being unable to recover compensation if a rideshare driver caused an accident that injured them since most of the vehicle insurance policies on private cars do not cover commercial use.  While the company could potentially be sued and companies like Uber, Lyft and Sidecar have insurance policies, the companies have indicated that the drivers of the individual vehicles are responsible for any accidents. 


If the companies connecting the drivers aren’t held responsible and the drivers have insufficient insurance, obtaining compensation for recovery-related expenses after an accident could prove extremely challenging. Further legal clarification as to the duty of Transportation Network Companies to provide safe transportation options to their customers is necessary to ensure they will have recourse through the civil justice system should an accident occur. 


Additional articles on public safety and the civil claims process after an accident are available to the public free of charge through our office’s Preferred Friends and Clients Program.


If you would like to request one of these free resources, or to speak with a California injury lawyer, please call 866-981-5596. 

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