The Relation of Rideshare Workers’ Rights and Accident Insurance

The gig economy introduced an entirely new model of labor to the American workforce — as opposed to the typical employment structure of most businesses, food delivery people, dog boarders, and drivers who work for smartphone-app-based corporations are classified as independent contractors. With this categorization comes a reduction in benefits, and a separation between employee and employer.

Under traditional employment models, workers are often considered as an extension of their company, meaning employee misconduct can be linked back to the business. If a worker harms a customer, their employer is often held liable for their actions.

The “independent contractor” label opens an opportunity for rideshare companies like Uber and Lyft to effectively wash their hands of the behavior of their drivers. For Uber and Lyft passengers, the consequences of this separation can arise if they are injured in an accident in a rideshare vehicle.

Uber and Lyft each have accident insurance policies which offer up to $1 million in coverage, but both companies are able to deny coverage based on the driver’s identity as an independent contractor. Additionally, the use of the driver’s vehicle for ridesharing could be a reason their personal insurance company denies coverage, leaving the injured passenger unable to pay for injury-related expenses.

However, the gig economy is changing — Uber and Lyft drivers around the country are fighting for their rights as workers. Voicing their support for laws that would reclassify them as full employees, drivers are working to change their independent contractor status in hopes of achieving higher wages, overtime pay, and other benefits. Potentially, this could include expanded insurance coverage for passengers.

Driver protests and attempts to regulate the ridesharing industry have been met with fierce opposition for Uber and Lyft. Since their founding, the companies have operated on the business benefits of the independent contractor model, and believe a change would severely cut revenue. Hopefully, the continuing fight of drivers will lead to successes for workers and their customers.

Recovering just compensation for an Uber or Lyft accident is not impossible under the current model. If you were injured in a rideshare accident, contact Ortega, McGlashan, Hicks & Perez, PLLC. We represent Uber and Lyft passengers who were denied coverage following a collision.

Schedule a free consultation with our legal team by calling (915) 206-5154, or by submitting your information on our website.