Ridesharing May Be Safer Than Taxicabs
In many urban markets across the United States, ridesharing services are gaining popularity against traditional taxicab companies. Ridesharing companies like Uber and Lyft use the driver's own personal vehicle to shuttle passengers to their locations. Taxicab drivers use company cars to transport riders. Many of these taxi companies, concerned about the competition that ridesharing services bring to the table, have claimed that passengers using ridesharing services are not protected in the event of an accident.
The difference between ridesharing services and traditional taxicabs is largely due to their setup. Taxicabs are run in a more individual manner, where the drivers act as independent contractors who work long hours. Ridesharing services operate more like a commercial carrier where the drivers are more regulated by the parent organization.
Excess Coverage Insurance Protects Riders
Personal insurance policies often will not accept a claim if the driver was acting for profit when the accident or injury occurred. This does not mean that passengers using ridesharing services are doing so at their own risk. These ridesharing services use a concept called excess coverage to protect their riders, which means that the company carries a policy above what the personal driver's insurance may cover. Uber, Lyft, and other parent companies will cover any damages that the driver's personal insurance does not cover.
In fact, ridesharing services provide extensive coverage for their riders. While insurance companies for drivers generally require coverage of $10,000 to $25,000 per person per accident, taxicab companies mandate $250,000 to $500,000. Lyft insures drivers up to one million dollars' worth of damages. Further, Lyft and Uber will also provide coverage for passengers injured in accidents completely caused by another driver or if their driver was involved in an accident with an uninsured motorist. Taxicabs do not offer this type of coverage for their riders.
While taxicab companies have been threatened by the popularity of ridesharing companies in major cities, ridesharing services may fit the needs of riders better than traditional taxicabs. In terms of safety, ridesharing services completely cover their passengers in the event of an accident in ways that taxi companies do not.