A fatal accident involving a California ride-sharing driver has illuminated the potential risks to using this new high-tech carpooling system. The question is who pays when something goes wrong?

Companies such as Uber, Lyft and SideCar have previously insisted that the insurance they provide to their drivers is sufficient to cover most auto accidents. However, a recent catastrophic incident, involving a six year old, who was killed while crossing a San Francisco street, with her family, illustrates the uncertain territory in which these new taxi-like services operate. Uber, disputes its responsibility for one of its driver’s causing this fatality, because he was not carrying any passengers at the time of the occurrence.

Other ride-sharing firms dubbed “Transportation Network Companies” recently received permission to legally operate in California, in September. These firms connect people who need rides and drivers of their own passenger vehicles by a smart phone applications. Operators retain a portion of their fares which seem to be as much as a 1/3 cheaper than those of traditional taxis.

These firms, are regulated by the California Public Utilities Commission. As part of the new rules they operate under, companies must carry $1,000,000 worth of liability insurance when a privately owned car is being used to carry a passenger for a fee. The liability coverage kicks in when damages exceed the limits of the driver’s own personal liability policy. Therefore, it acts as an excess Umbrella Policy.

However, it is currently uncertain exactly when these drivers and their own vehicles are actually covered by the excess policies required by the California Public Utilities Commission.

It is currently unclear whether passengers, pedestrians, and other drivers are sufficiently protected against the actions of any of the drivers who participate with these transportation network companies.

It’s also unclear, whether an individual’s own private insurance policy, would provide any protection in the event that they were negligent while operating their own vehicle when working for these companies. Most standard auto insurance policies contain exclusion for “Livery” which essentially means driving for hire. Commercial policies, do provide coverage for providing a vehicle for hire. However, commercial insurance premiums are typically Ten times more expensive than those charged for personal auto policies. Additionally, passengers are not covered for uninsured or underinsured coverage, while an occupant of a transportation network company vehicle when they are involved in an accident which is due to the negligence of the driver.

It appears that it’s now up to the PUC to require better insurance coverage for ride-sharing drivers. At a minimum, these ride-sharing companies should be required to carry the same commercial auto insurance policies as taxi owners. That requirement would eliminate the gap in insurance where the personal insurance of the driver won’t apply when he or she is providing commercial transportation.

The California Department of Insurance should also require additional safeguards, to protect the victims of accidents, which occur through the negligence of a driver who is participating in one of these ride-sharing companies.

If you or a close family member have been involved in an accident involving either a commercial carrier, trucking company, or ride-sharing company, please feel free to contact Gary Sernaker. He has been representing victims of these types of accidents for over 30 years and will be able to evaluate your case in order to obtain the compensation that you are entitled to under California law. He can be reached at (858) 509-0188 or by email at gsernaker@gmail.com.