While rideshare services such as Uber and Lyft are seemingly here to stay, the laws, regulations, costs, responsibilities, and benefits surrounding app-based car services are constantly evolving. As attorneys who represent victims of traffic accidents and routinely take on auto insurance companies, we are keenly aware of the pitfalls of drivers finding themselves inadequately insured after an accident or not understanding the laws that affect them.
If you are thinking of driving for an app-based rideshare service, or have already started, we encourage you to take into account the following considerations and most of all, make sure you are adequately protected if you are in an accident and fully aware of your responsibilities as Uber or Lyft driver.
- Understand that you will be running your own business
It may not take long to get set up as a driver for Uber, Lyft, or another app-based rideshare service, but keep in mind you are only getting approved to work for those companies – you are still responsible for setting up and running your own business. This means that you are responsible for a lot of taxes, expenses, and details not readily apparent when you sign up as a driver. Having the mindset of a responsible business owner, however, is the first step in finding any degree of success as an Uber or Lyft driver.
- Check with your insurance company before driving
This is without a doubt the most important thing to do before ever turning on a rideshare app as a driver. Insurance laws affecting rideshare services vary greatly from state to state and the amount of coverage you have in an accident could be completely dependent on the type of insurance policy you are carrying. Uber and Lyft do provide insurance coverage for their drivers, but because there can be a lot of gray area surrounding what a driver is specifically doing at the time of an accident, this insurance may not cover you.
Auto insurance companies tend to see a rideshare driver falling into one of several categories at any given moment behind the wheel: driving with the app off (personal driving time), driving with the app on looking for passengers, driving to meet a passenger, and transporting a passenger. This leaves room for a lot of gray area that can be exploited by an insurance company not wanting to pay a claim. Add to this the fact that you personally will be dealing with two separate auto insurance companies (your personal auto insurance and that of the rideshare service) and should another driver be involved you will be dealing with that driver’s insurance company as well – if that driver has insurance.
As attorneys who take on auto insurance companies on a daily basis, we can tell you that these gray areas can leave you open to liability for damages that can be financially devastating. Don’t take chances with your responsibilities as a driver. Depending on local laws and insurance regulations, you may have to consider a costly commercial insurance policy if you want to be sure that you and your passengers are adequately covered in the event of an accident.
- Keep records
An important part of running your own business is keeping records for tax purposes. With there being so many expenses associated with operating a motor vehicle, there can also be a lot of opportunities for tax deductions. Keep a log of your mileage and make notes of any significant details or events of your time behind the wheel. Also, keep records of any purchases and maintenance associated with using your car as a rideshare driver, and keep all your receipts! Beyond providing you with the information you need to claim valuable tax deductions, if you are ever in an accident, these receipts and records could be critical should you have to hire an attorney in order to protect yourself after an accident.
- Be aware of the wear and tear
Many Uber and Lyft drivers don’t take into account the wear and tear on a vehicle that driving professionally can inflict or the rapid depreciation of their vehicle’s value when exposed to this level of use. The city driving and stop-and-go traffic normally associated with areas more lucrative to Uber and Lyft drivers are mechanically the hardest on cars, and this type of driving can dramatically reduce the life expectancy of your vehicle, not to mention require more frequent oil changes, tire replacement, and routine maintenance.
Driving paying passengers can also be hard on your car’s interior – especially if you frequently are driving fares at night who are trying to avoid a DUI. Many rideshare drivers provide vomit bags and sanitary wipes to make it easier for their fares to keep it clean. Even if you are lucky enough to avoid the occasional “accident” in the back seat, you will still be facing more frequent washing and detailing costs. What is important here is to factor in the hidden expenses and headaches associated with the wear and tear your automobile is about to face.
- Have the right attitude when behind the wheel
Attitude is everything. While you may be excited about the prospects of making a little extra money with your personal automobile, you are still ultimately responsible for your passengers’ safety. You are also responsible for your actions when encountering other vehicles, cyclists, and pedestrians as well as your own safety. Be aware that driving for an app-based rideshare service adds an extra layer of distraction to your time behind the wheel. Follow the guidelines set by the rideshare services themselves and always drive with the utmost level of responsibility and courtesy. Whether you drive for a rideshare service or not, this last point can help make our roadways safer and more enjoyable for everyone.
If you would like a more in depth look at the pitfalls of driving for an app-based rideshare service, we encourage you to read our fictional blog series about Tamara, an Uber driver who is injured in an auto accident while between fares.