Lyft in Mankato and Accident Liability

Good news for those who like affordable rides – Lyft announced its expansion to more than 100 new markets in the Midwest in 2017. Among those markets is the town of Mankato. This expansion will help provide safe transportation for members of our community. However, while many see this development as a positive advancement for the city, some are asking who will be held liable if an accident should occur.

Liability and Ride Sharing Services

Peer-to-peer car sharing services have exploded into popularity in recent years, but they’re not without controversy. Uber and Lyft are businesses that function as taxis, but use smartphone apps to provide people with rides around town. Unlike traditional cabs, however, Lyft and Uber don’t use company cars and trained employees to usher you from location to location. Instead, driving services are provided by amateur drivers using their own vehicles.

These companies have come under fire recently because of their questionable legal status. While cab owners and drivers must pay, under federal law, specific fees and undergo certain inspections and testing, peer-to-peer drivers aren’t subject to the same laws. When a person needs a Lyft, for example, all he or she must do is log into the app and find the nearest driver willing to accommodate a travel request. Since customers pay drivers using the company’s proprietary app and no cash exchanges hands – not even a tip – the company manages to avoid for-hire regulations and laws. This makes liability concerning Lyft drivers difficult to navigate.

So What Happens in an Accident?

Lyft and Uber operate in this manner to avoid company liability in case of an accident. With traditional cab companies, fault, insurance, and compensation are relatively clear. Cab drivers are insured by their respective companies, who are insured and will provide compensation in the event a driver is at fault for an accident. Drivers and companies face further regulation from the state or municipality. Cab owners face stringent insurance requirements, and each state has cab-specific laws on the books. However, this isn’t the case for Lyft or Uber.

Lyft carries a type of insurance that covers its drivers when they’re actively transporting a passenger, but it’s often secondary to the driver’s personal insurance policy, which creates compensation headaches when an accident occurs. Matters are further complicated when a Lyft driver is on the clock but not transporting a passenger.

An Unclear Case of Liability

Consider the case of Syed Muzaffer, an Uber driver who was charged with vehicular manslaughter when he struck and killed a 6-year-old in San Francisco. Although Muzaffer was on shift, he was not actively transporting a passenger. Because of this, Uber denies liability, but Muzaffer’s personal policy is not enough to compensate for the family’s pain, suffering, and final expenses. Instances like these illustrate the issue with peer-to-peer ride services. If companies will not step up and compensate for accidents then both drivers and victims of injury will have a hard time overcoming the financial implications of an accident.

Other Troubling Considerations

States often set limits for cabs regarding minimum insurance coverage. Currently, only two states, Alaska and Maine, set $100,000 minimums per accident, which is the amount that Uber and Lyft provide when a driver is carrying a passenger. However, according to the Insurance Research Council, at least 12% of drivers have no insurance. The prospect of underinsured Lyft and Uber drivers poses new questions about liability if companies are unwilling to take responsibility for their drivers. While the inclusion of these services in Mankato will help many people, states and municipalities that offer ride sharing have an obligation to set regulations for these drivers so others on the road have options in case of an accident.