Ridesharing companies meet to discuss public liability insurance, won't share details with the public

By Carmel DeAmicis , written on February 25, 2014

From The News Desk

A few weeks ago, Lyft trumpeted the formation of the first ever ridesharing insurance coalition. The company would be bringing together key industry players -- other ridesharing companies like Uber and SideCar, insurance representatives from AllState and Farmers, and government regulators like the California Public Utilities Commission.

The group would discuss "insurance best practices" -- whatever that means.

At the time, Lyft said the coalition would be meeting the last week of February -- i.e. sometime this week. But as the deadline steadily approached without a peep from the company, I grew suspicious. So much fanfare for the announcement of the coalition, but nary a word about the actual first meeting?

I reached out to Lyft for meeting details and -- shocker! --  found out that, while the meeting is still scheduled, press and the public were not invited. To a meeting whose purported mission was to "[provide] information resources for regulators, drivers, and riders to ensure a safe and trusted future for the emerging peer economy."

Ah, the sweet sweet smell of secrets.

Of course, a closed door meeting raises an inevitable question: Why doesn't the ridesharing industry want us to know about their insurance arrangements?

At this point, information about insurance for private hire vehicles is a matter of public safety. We can look to the pedestrian injured by a fire hydrant when an Uber driver hit another car, or to the family suing Uber for compensation for their daughter's death. People have a right to know more about ridesharing insurance practices, before they get hit and the company washes its hands of responsibility.

The insurance policies of taxi companies have long been a matter of public record. Rideshare companies however use manually drafted policies, custom deals struck between companies and insurance providers themselves.

That means we don't know what, exactly, insurance companies have agreed to cover.

"Someone could say, 'We cover green colored vehicles on the third Friday of the month,'" Bill Rouse, General Manager of Los Angeles Yellow Cab, offers as an example. "Even the very basic information of those policies is a protected trade secret, unlike taxi companies's a public document."

When Lyft announced its new, expanded coverage, it proudly trumpeted that it "push[ed] the insurance industry to innovate quickly and create unique solutions." The expanded coverage was designed to protect Lyft drivers in the event of accidents.

But the company stayed mum on the details, and it certainly didn't publish the policy itself for the public's inspection. Lyft cherry picked the information it wanted to share.

"Each policy has exclusions, terms, and conditions," the Taxicab, Limousine & Paratransit Association's (TLPA) President Robert Werth says. "And without seeing those terms and conditions we don't know who is covered and who is not."

Sources from within the taxi industry claim the cloak and dagger secrecy around ridesharing insurance is because these companies don't want to pony up for full liability policies. After all, insurance is one of the taxi industry's largest expense items.

Uber, Sidecar, and Lyft have a big competitive edge by not having to pay for the same level of coverage. The cost of 24/7 insurance could potentially put these startups out of business or force them to raise their fares much higher to retain drivers.

"This gap in the insurance is going straight to their bottom line," TLPA's Werth says. "Their failure to carry proper insurance is giving them the ability to undercut the taxi cab industry by up to forty percent."

Cheaper rates are great for passengers of course, but not so great for any person injured as a result of a ridesharing accident.

Without the public or media allowed to read ridesharing insurance policies, we can't know exactly who is protected and who is exposed.

Only by opening the doors to these type of coalition meetings -- and publishing the resulting policies -- can passengers be confident that the ridesharing insurance coalition is anything more than a public relations exercise.

[illustration by Brad Jonas for Pando]