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Be Careful When Using New Uber Ridesharing App

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Rideshare Companies Claim Cars Are Insured, Drivers Need Not Worry

You may have heard of the new car service company, Uber, which opened in four Michigan cities last week.  Uber is an app that essentially connects people seeking rides with drivers of private or commercial vehicles and is now available in Lansing/East Lansing, Grand Rapids, Flint, and Kalamazoo.  The company claims that users of its shared vehicles are covered in the case of an accident but insurance groups and state officials are telling users to proceed with caution.  A spokesperson for the company, Laura Altmin, says that:

Uber’s ridesharing subsidiary (Rasier LLC) maintains commercial auto insurance on behalf of partner drivers that provides for Michigan No-Fault coverages including Michigan Personal Injury Protection and $1MM of Michigan Property Protection Insurance. This is in addition to the $1 million per incident coverage for third-party liability and other coverages available in all states where ridesharing is offered. 

However, insurance providers in Michigan say they are unsure of how driver and passengers using Uber would be covered, leading insurers and state authorities to warn consumers to proceed with caution when using the service.

When Unauthorized Drivers Take Passengers in for Commercial Purposes, Rules Change

When insurance representatives in Michigan were contacted about Uber’s claims, they stated that it appeared that Uber did not have the type of insurance coverage it claims.  Furthermore, state laws regarding taxi services require that a cab carrying nine or fewer passengers have bodily injury and property damage liability with a minimum combined single limit of $1 million per person injured or property damaged.  However, when private owners of vehicles take in passengers, they are likely not carrying this type of insurance, thereby acting outside of what their policy covers.

Other Taxi Services in the Area Disappointed by Uber’s Entry Into Marketplace

Other taxi services such as Bee-Line Taxi say that they are disappointed that Uber is entering into the marketplace for providing rides.  The manager of Bee-Line, Derek Palmer, says that the company goes through many hoops to ensure that their rides are safe for passengers.  For example, Bee-Line performs background checks on drivers, having safety inspections regularly preformed on its vehicles, and carrying commercial insurance.  However, East Lansing Mayor Nathan Triplett says that companies such as Uber are regulated differently than taxi companies and that a proposed agreement between Uber and the city will satisfy background checks and liability coverage.  There is still gray area, says Mayor Triplett, and that drivers participating with Uber should contact their insurance company prior to providing rides.

If you or a loved one have been injured because of an automobile accident please contact Church Wyble immediately.

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  1. chi1cabby says:
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    Ride-sharing business model is based on regulatory arbitrage, dubious insurance practices, and exploitation of drivers they’ve lured into signing-up by making fraudulent claims of potential earnings. The drivers have woken up to this reality and are uniting to raise awareness of their woes and bring an end to their exploitation. Visit http://www.UberPeople.net to learn more about the true state of ride-sharing.