Posted by Ric Garrido

There are frequent articles in the San Francisco Chronicle about travel start-up companies like car ride service Uber and accommodation booking service AirBnB and the disjointed regulatory environment encompassing their services.

On New Year’s Eve in San Francisco, a six-year-old girl was killed by an Uber contracted driver who was not carrying any passengers at the time of the accident. The driver was logged onto the UberX app looking for passengers when the accident occurred.

Uber sued in San Francisco girl’s death

 

This week there was a lawsuit filed by the girl’s family against Uber.

The suit, filed in San Francisco Superior Court, alleges that the driver of the vehicle – who was at that time an Uber contractor – was logged on to the company’s UberX app when he fatally struck Sofia Liu and was waiting to receive and accept a ride request. The driver’s attorney has also said he was between fares.

The company, which takes a cut of every ride booked through its system, declined to comment Monday. In the past, Uber officials have said the driver, 57-year-old Syed Muzzafar of Union City, was not providing services on the company’s basic UberX system because he did not have a passenger with him.

Lawsuit’s allegations

The suit calls this a narrow view of how companies like Uber do business. Christopher Dolan, the family’s attorney, said the phone-based interface that drivers use to find fares contributed to the death of Sofia, along with injuries to her mother, Huan Kuang, and 5-year-old brother, Anthony Liu. Dolan said Uber had denied insurance protection that would have covered the family and the driver.

Because drivers must interact with the Uber app to locate and pick up riders, the app violates a California law that seeks to cut down on distracted driving, the suit says. Uber drivers “must respond quickly to a user request for service by physically interfacing with the app, thereby leading to distraction,” the lawsuit states.

SFGate.com Jan 28, 2014

Uber sued over girl’s death in San Francisco

Another article appeared in the San Francisco Chronicle today, Drivers for Uber, Lyft stuck in insurance limbo on the topic of drivers contracting with car ride services like Uber and Lyft being stuck in limbo between holding personal auto insurance and commercial insurance coverage.

Turns out that drivers who have been in accidents find their personal insurance will not cover their damage claims once it is determined they were contracted as a paid commercial driver and carrying paying passengers. And commercial driver insurance is far higher than personal insurance.

Uber and Lyft are required to carry liability coverage for passengers, however, there are coverage gaps. Like the 6-year-old girl who was killed in San Francisco on New Year’s Eve.

2014 is still the wild west in terms of the regulatory environment governing contracted travel services like Uber, Lyft and AirBnB. Contractors can get screwed, the public can get screwed, travelers get discount rates, travel bloggers get referral commissions for promoting these services, and the tech companies are rapidly growing toward the day they can cash out in a big IPO.

I am all for increasing travel options with car ride services like Uber and Lyft and services like AirBnB for lodging. These companies use the web to benefit travelers and create jobs. I am also for a regulatory environment that protects consumers and the public from situations that arise with these travel service innovations.

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Ric Garrido of Monterey, California is writer and owner of Loyalty Traveler.

Loyalty Traveler shares news and views on hotels, hotel loyalty programs and vacation destinations for frequent guests.

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7 Responses

  1. I think the article and Ric get it right when they say clearer regulation is needed. Its not fair to the public if Uber drivers are essentially driving without insurance. As a legal matter, these claims could easily fall into a grey zone where the only person to sue is the driver personally and the driver likely has no money to pay out in a lawsuit. This issue is likely to keep coming up as Uber expands and, at least in my admittedly not statistically significant experience, the average driver is becoming less skilled. As they need more and more people I believe they are being forced to accept drivers who perhaps don’t have the needed knowledge of the area or driving experience one would want a Uber driver to have.

  2. @Dan

    +1

  3. I agree. It’s great that these services are filling demand in the marketplace, but at the same time they should still be regulated.

  4. I don’t believe Uber should be liable just because someone was using their app and driving distracted. That would open the door to any company being sued because someone was using their app and driving distracted. Sue Words with Friends because a driver was using it and driving? It might be possible for Uber to disable certain features for drivers while the phone is moving.

    It could even open the door to suits against a homeowner if a contractor working on their house hit someone while driving to the store for supplies – you know, it was required for them to pick up supplies to do their job, so it is *your* fault.

    I do think that a suit against Uber for using a driver that doesn’t have commercial insurance is the way to go (contributory negligence, I believe). AirBnB could require a certain level of insurance also. For both of these, I would require that the company (Uber or AirBnb) be listed as additional insured. Uber would then get documentation on the insurance for each driver and would be covered in case some driver did something stupid – not that they should drop their own insurance.

    If you are using your vehicle for business purposes, you should have the proper insurance. I have business insurance for my vehicle even through I mostly use it for personal use. Since I don’t carry paid passengers, it isn’t that much more than regular insurance.

    If this driver did not have the proper insurance, then he(and the vehicle owner, if it isn’t him) is fully responsible. I suspect he doesn’t have deep pockets and that is why the family is going after Uber. If Uber has been sloppy in their business practices, then they might end up paying for it.

  5. Interesting thought on Uber requiring the commercial insurance. The one article link is about a guy who seemed to want to drive as side income and realized he couldn’t afford commercial insurance and didn’t want liability issues for a some part-time income.

    After years studying working conditions and employer-employee relationships, the trend that has taken hold in the web-based and many other brick-and-mortar businesses is the use of self-employed contractors who get minimal financial or employee support from the company their work help builds.

    The contractor relationship with companies is a lovely way to keep profits since there are so few employees getting a stake of the wealth generated.

  6. I agree with you Rick, it is a very disturbing trend the way companies are increasingly not hiring, but contracting. I first heard of it when my mom helped my college age cousin do her taxes. She had taught some classes at a yoga studio and was having to file as self emploed because she’d been hired as an independent contractor. Huh?!?

  7. Hello there! This post could not be written any better! Reading this post reminds me of my good old room mate!
    He always kept chatting about this. I will forward this post to him.

    Pretty sure he will have a good read. Thank you for sharing!

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