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    Lyft Put Together a Ride-Share Insurance Coalition—Without Uber

    Written by

    Max Cherney

    A car sporting Lyft's trademark pink moustache. Image: Spiros Vathis/Flickr

    After the death of six-year-old Sofia Liu on New Year’s Eve allegedly at the hands of an Uber driver, and another collision a couple weeks later involving a Lyft driver, there has been an enormous amount of attention focused on insurance gaps in the ride-sharing industry. It’s not a new concern. The state of California, where many such companies are based, issued guidance in 2013, and the issue garnered particular concern following a bizarre collision in the spring of last year.

    So it wasn't much of a surprise when Lyft announced this week that it’s taking measures to address major gaps in insurance coverage for itself and other companies like it. The full list of participants in the Lyft-led “Peer-to-Peer Rideshare Insurance Coalition” has yet to be released, but it’s going to include a government regulatory body—the California Public Utilities Commission—and other “industry leaders” which have not yet been announced. Conspicuously, Uber will not be among them.

    It’s hard to know exactly why Uber isn’t participating in what’s been recognized as a critical issue that the industry must address if it’s going to survive. The most obvious reason might be that Uber was never invited to participate, which could arguably be because of good old fashioned competition with Lyft. Whether that’s the case isn’t clear; both company’s statements on the topic were nothing if not vague.

    Another could be Uber’s position on its responsibility for the six year old’s tragic death at New Year. The company has basically said that, even though the driver responsible had the Uber app activated and was searching for a fare, it shares absolutely no responsibility for the girl's death. The driver is an independent contractor, the company has said, which perhaps suggests it’s keen to distance itself from its drivers. And the relationship with drivers wasn’t that great to begin with. Uber drivers staged a protest back in March 2013, and have filed a class action lawsuit in federal court over Uber allegedly deceiving customers about how much of a tip the driver gets.

    To be fair, Lyft’s plan isn’t entirely perfect either. For example, it lacks coverage for injuries a driver might sustain in a crash. And in cases where a driver has purchased collision insurance on their personal policy, Lyft’s new scheme comes with a $2,500 deductible (money paid out of pocket before insurance kicks in).

    But, at least Lyft’s effort is better than what we had before. It does protect against un-and-underinsured drivers—up to $1 million in both cases. Lyft is also saying that it’s created a $1 million policy in excess of personal insurance, which would be applied if a driver’s personal insurance refused to accept liability for a collision.

    At such an early stage it’s impossible to know whether or not Lyft’s new effort will assuage concerns over the apparent problems with coverage in the industry, or improve morale amongst its drivers. It’s clear, though, that Lyft—as in the past when it first sought to be insured—is pushing insurance companies, and the law, to catch up with an industry that looks like it's here to stay a while.