I’ve never used Uber or Lyft. That probably puts me in a minority or at least a dwindling majority. Either way, in case you haven’t heard, ridesharing recently graduated from college bulletin boards and went into business for itself.
I wish I had thought of this first. Buy some servers and set up an online network that offers cab service. Then go out and recruit motorists to convert their cars into cash cabs. The network provides demand. Drivers supply it. They get paid. I get paid.
This is beautiful, unless you operate limos or own an established cab company. In that case you probably see ridesharing as an unfair competitive threat to your quasi-monopolistic revenue stream. Unfair, you say, because limo and cab companies are regulated. Rideshare networks aren’t.
Cab companies have to background-check drivers and obey vehicle-safety standards. Rideshare networks don’t.
Limo and cab companies have to buy minimum mandatory limits of commercial auto insurance. Rideshare networks don’t.
It sounds sweet for the rideshares but the intersection of Insurance Street and Policy Avenue just might be where rideshare networks crash and burn in Florida.
Are you insured? That’s a nagging question concerning every Florida rideshare driver and rider. If I was one, I’d crave certainty on this point because I can’t afford to pay out of pocket for an auto-liability claim involving a rideshare gone wrong. I probably can’t afford commercial auto insurance either.
Personal auto insurance policies don’t cover taxis. If you own personal auto insurance, you probably signed an application saying you don’t use the insured vehicle as a livery (aka taxi). Personal-auto insurance companies aren’t down with ridesharing, either, which is why they’re changing policy terms to be even more explicit about excluding coverage for ridesharing cars.
Cab companies have always faced independents who don’t play by the rules. And cabbies have been known to employ some “inventive” methods of discouraging them. But gypsy cabs are one problem. Ridesharing is another, which explains why you’re seeing this and this.
Florida cab companies are suing the Florida Department of Highway Safety and Motor Vehicles. They want this overly named, and apparently uncertain, agency to decide whether rideshare networks must obey the same rule that requires Florida taxi operators to insure their cars with commercial auto insurance at all times.
Uber does offer commercial auto liability insurance through James River Insurance Co., which ostensibly covers Uber cars when they’re on the network. But taxi operators say Uber’s insurance policy violates Florida law in two ways. One: it’s a part-time policy. Florida law requires full-time commercial coverage on cars for hire. Two: James River and its ilk are not members of the Florida Insurance Guaranty Association. Florida law says you’re not supposed to sell car insurance in Florida, unless you are a member of FIGA.
So, in terms of risk exposure, where does this leave Florida rideshare networks and their customers? Are they legally insured in Florida? Can they rely on coverage for liability claims? The best answer seems to lie somewhere along the road between “I think so” and “I’ll get back to you.”
David Hackett has been a licensed Florida P&C insurance agent since 2009. He is one of three founders of Beacon Insurance Partners, Inc. Established in 2013, Beacon Insurance Partners works to lend clarity to your insurance decisions so you can live, work and play with confidence.