Protecting the Public From Unqualified Uber Drivers

The New Jersey Legislature passed the Transportation Network Company Safety and Regulatory Act (the “Act”) in 2017, and therein established certain insurance requirements for the now seemingly ubiquitous rideshare companies Uber and Lyft. At first blush, these insurance requirements seem like good public policy measures, but, on further analysis, they are insufficient.  The Act requires that a driver and/or a ridesharing company have at least $1.5 million in insurance coverage for bodily injury arising out of an accident that occurs while a driver is on a “prearranged ride,” which the Act defines as the time between a driver accepting notice of a ride to the time when the passenger is dropped off.  Additionally, the lawsuit limitation, or “verbal threshold,” does not apply to accidents that occur during a “prearranged ride.”

But what about all of the time when a driver is cruising around waiting to be summoned for a ride? What is the policy rationale for not requiring the heightened insurance coverage during this time? After all, the drivers are out and about and on the road in order to get rides. Indeed, Uber and Lyft drivers clog the roads in certain high-population areas – putting the pedestrians they are hoping choose to take a ride in harm’s way.

The clear danger leads to a commonsense question: Why should a pedestrian who is hit by an Uber driver who is in between rides receive less coverage than if she were hit while the driver had a passenger in the car? There is no good public policy explanation, and the law should be changed to a flat $1.5 million in liability coverage regardless of whether the driver is on a ride or in between rides and cruising until he gets one.

Then, there is the question of how one can determine whether a driver was summoned and on the way to get a passenger, which would trigger the Act’s heightened insurance coverage, or just cruising, which would limit the insurance coverage to $50,000. Our firm has such a case, where Uber claims its driver was just cruising when she ran down our client, who was walking across a pedestrian crosswalk in a high-pedestrian-traffic area.

Moreover, the driver at issue has a bad driving record and it is unclear, what, if anything, Uber did to vet or train this driver. One thing is clear: While the Act requires a driving record check, it only disqualifies drivers that have recently committed serious driving offenses like driving under the influence or driving recklessly. Should drivers who have committed less serious – but no less dangerous – moving violations be permitted to Uber drivers?  The answer should be an absolute, “No.”  We believe we also have a solid negligent supervision and negligent hiring claim against Uber, which should get us past the $50,000 insurance limit if it applies.

Uber and Lyft provide great service, but policymakers need to do more to protect passengers by extending the $1.5 million insurance coverage to car crashes involving a driver who is  simply “on the clock,” and by requiring rideshare companies to do a better job of vetting and training drivers.  Meanwhile, plaintiffs’ lawyers need to be vigilant and creative when litigating against ridesharing companies.

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