Uber and Lyft – Know What You Are Getting Into (Part 1)

I don’t know anybody that hasn’t used Uber or Lyft, or some other transportation network company. Due to the ever-increasing demand for Uber/Lyft transportation, California enacted a law to provide some measure of Uber and Lyft driver protection , other drivers on the road, and passengers. In this part, I’m going to try to lay out the law for you. In the next part, I will try to discuss certain scenarios that you need to be aware of as drivers or passengers. Basically, there are gaps in this law that you need to be aware of.

Under Assembly Bill 2293, Uber and Lyft is required to provide auto insurance under certain circumstances. The bill actually divides it all up into three stages (I like calling it Stages, but the bill actually says “period” which I always found confusing). The driver’s personal automobile insurance does not apply when one of the below stages apply. (AB 2293 has been codified into law and is actually under the Public Utilities Code, Div. 2, Chapt. 8, Art. 7. I will call it AB 2293 for now and afterwards just because it’s easier).

Stage One  – At this stage, the minimum liability insurance that must be carried by an Uber or Lyft driver is $50,000.00 per person, $100,000.00 per incident, and $30,000.00 for property damage. Stage One insurance applies in two scenarios: (1) Once a driver “logs on” to the transportation network company’s online-enabled application or platform (basically the app) until the driver accepts a request to transport a passenger, OR (2) the previous ride is complete, the driver is still logged on the app, AND has not yet accepted another ride. The bill also requires that Uber or Lyft carry $200,000.00 in excess liability coverage. The last part is confusing, but I will discuss it more in the upcoming post.

Stage Two and Three – At Stages Two and Three, the minimum liability insurance that must be carried by an Uber or Lyft driver is $1,000,000.00 for death, personal injury, AND property damage.

Stage Two insurance applies once a driver “accepts a ride request” on the app and until the driver completes the transaction on the app or until the ride is complete.

Stage Three insurance applies once the passenger enters the ride and until the ride is complete or the passenger exits the ride.  In addition to the $1,000,000.00 minimum Liability Coverage, Uninsured and Underinsured Motorist Coverage must be $1,000,000.00 as well. This last part is presumably for the passengers.

That’s the law, it’s pretty straight and simple right? Wrong. As I said before, there are gaps in this law that you should be aware of and I will try to flesh it out in my upcoming posts. For now, at least you know there must be some sort of mandatory minimum insurance coverage by Uber or Lyft.