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Concerns Arise Over Possible Insurance Gap For Ride-Share Drivers

Ryan Loyd
TPR News

Ride-sharing company Lyft said it has passengers covered in the event of an accident. But some believe the drivers are stuck in an insurance gap that's putting them at risk.

When Lyft began its operations in San Antonio several months ago, Terri Richardson hopped on the band wagon as a driver.

She feels safe, and believes Lyft's got her covered if anything goes wrong.

"I think Lyft is a good company. They stand behind their people," Richardson said.

Joseph Okpaku, the Lyft government relations manager, said he couldn't agree more. Lyft, he said, provides 16 times more insurance coverage than what's required by current law in the city of San Antonio.

"We also provide $1 million of coverage against incidents that involve under-insured drivers and uninsured drivers, neither of which are currently required for San Antonio taxis," Okpaku said during a recent trip to the Alamo City. "So again, these are examples of differences between our model and the existing model and we're not looking to escape those responsibilities. We're more than happy to continue providing that but we just need a regulatory framework that acknowledges differences like that."

But there is concern. Among those voicing their worry is Joe Woods with the Property Casualty Insurers Association of America. Woods said personal insurance doesn't cover a driver who accepts money from people for a ride.

"They're driving to downtown Dallas to pick folks up at bars at two in the morning, or 6th Street in Austin, or wherever it is," Woods said. "They've broken the pattern of what one would expect from a private passenger auto. So that person's risk profile has changed and the possibility of them having a loss has changed."

Paige Thelen, a Lyft representative, explained the insurance details: If a driver is running errands on their own time, they are on their own insurance policy, she said.

Once they turn on the smartphone app to pick up a passenger, a contingent liability coverage plan kicks in. Coverage on this plan includes personal bodily injury up to $50,000, $100,000 for total injury and $25,000 for property. When a passenger gets in, Thelen said the $1 million coverage picks up.

But Woods said taxis are covered 24 hours a day. With ride-share drivers switching between personal and professional duties, there is more room to question if a driver was on the job or not.

"We're not trying to stop the innovation but the hard part is getting some bright lines drawn here so that you don't have people caught up in the court system for the next three years trying to work these issues out," Woods said.

The city council continues to work with ride-share companies as well as the taxi industry on a solution. The council public safety committee will meet again in June to take up the matter.