I can remember the first time I heard the word Uber in the context of the transportation. It was only two years ago and I remember being perplexed once I received an explanation as to what an Uber was. My initial thoughts: “why would anyone want to get into a stranger's personal car?”; “why would anyone want strangers to ride in their car?”; and “who the hell is going to insure this?” Regardless, at least to me, at the time, it seemed like a fringe service. Fast forward to today, I use Uber, or one of its competitors, almost weekly, and I rarely rent a vehicle when I am traveling for work, instead opting to Uber.

With the rise in use of Uber, and its competitors like Lyft, litigators are going to start seeing more and more cases involving riders and drivers using ride-share apps. Before we begin, let me put this out there, this article is geared toward accident cases involving ride-sharing participants. This is not an article on employment law litigation or even insurance coverage litigation, although it will touch on that. Unfortunately, those topics need their own dedicated articles to truly begin to flesh out the plethora of issues that will and has arisen in those areas of the law. Unfortunately, we don't have the time or space to discuss them at length here. Now with that out of the way:

Insurance and the Ride-Share App

In the old days, the year 2010 (pre-Uber launch), it was easy (easier) to identify whether a car was or was not a commercial vehicle; in most cases, you could tell from just looking at the vehicle. Moreover, it was easy to determine a driver's insurance coverage; you would simply ask for an insurance declaration sheet.

In today's world, it isn't that easy as any car can become an independently owned taxi at any moment during the day, by having the driver simply sign up to drive for the service online or through their phone. As such, we must start our discussion by identifying the three “phases” of ride-sharing.

The first phase is when the driver is using the car for personal use and is not soliciting rides from the app. In this situation, the car is insured under the driver's personal insurance policy. A policy that which could be far less than the policy which would be in effect when the driver is using the app during the second or third phase.

As for the second and third phases, when the app is “in use,” on Nov. 4, 2016, Gov. Tom Wolf signed into law the “Transportation Network Companies” bill, 66 Pa.C.S.A. Section 2601, et al. That bill set up minimum insurance requirements to be covered by either the driver or, in the case where the driver's personal policy is inadequate or would not cover the accident because of an exclusion, by the ride share company's insurance policy.

During the second phase, when the driver has the app open and is soliciting fares, but does not yet have a passenger, the minimum insurance on that vehicle is $50,000 per person and $100,000 per accident. The law also requires $25,000 for property damage coverage. Additionally, during the third phase, which occurs once the passenger enters the car and is “on the trip,” the law requires a minimum of $500,000 in total coverage; although it is widely known that during this phase the bigger ride-share apps have $1 million policies that cover this period. These amounts far exceed the Pennsylvania minimum requirement of $15,000/$30,000, which could be in effect during the first phase.

Concerns for Plaintiffs

As a plaintiffs attorney, when dealing with a case involving a ride-sharing driver, one must inquire as to what phase the driver was at the time of the accident. When representing the driver, this could affect her claim in a number of ways, including whether the defense will bring up issues of distraction or other forms of comparative negligence and whether the data collected by the ride-sharing app (location, route, identification of “fares”) will come into play.

When representing a passenger of a ride-sharing driver, a plaintiff's attorney should be concerned about naming the proper defendants. Besides the obvious, the ride-share app driver and the driver of the “other vehicle” (assuming a two car accident), an attorney—so long as ride share app drivers are considered independent contractors—has to determine whether there would be any independent reason to bring in the ride sharing app as a defendant in the lawsuit.

Additionally, care must be taken to make sure the proper insurance company is put on notice of the claim. Do you place the ride share app's insurer on notice or do you put the driver's personal insurer on notice? Maybe both? The answer would depend on which phase the driver was in at the time of the loss. Moreover, was there any action on the part of the driver which could make the insurer, whichever policy was in effect, disclaim the coverage? For instance, did the driver stop to take on additional passengers who may not have used the ride share app (or were not associated with the person who called the ride on the ride share app)? Or did the driver make an additional stop with the passenger but did so without using the app or reporting the same to the app? (e.g., after arriving at the destination, the passenger realizes that he needs to make another stop and arranges a fare directly with the ride-share app driver).

Moreover, and also dependent on what phase the driver was in, there should be an inquiry as to whether a limited tort plaintiff would be considered to be “full tort” for your accident. Technically, during phase three (on the ride), a paying passenger likely would be considered an “occupant of a nonprivate passenger vehicle,” an exception to limited tort.

All of these issues would impact the value of the plaintiff's case.

Concerns for Defendants

Much of the same issues that concern the plaintiff also are relevant to defending a case where a ride share driver is involved.

When defending the driver of the nonride-share vehicle, one must take into account the potential liability of the ride share app driver and the ride share app company. The same analysis as noted above must be made as to whether there is any liability on the ride share app using driver or the ride share app company, so that a proper decision can be made as to whether circumstances would dictate the filing of a cross-claim or joinder pleading. Additionally, as noted above, the tort selection of the passengers would also be an issue as it can drastically change the value of the case and affect the way you litigate the case.

Where the difference is, at least initially, will be during the beginning phases of handling the defense of the ride share app driver. In those cases, it is advisable to immediately inquire what phase the driver was actually in at the time of the accident. Particular care should be taken to determine when each phase officially ended on the timeline of events, as there may be instances when accidents occur during a “transition” period. This inquiry must be made early as the actual timing of the event can materially affect the insurance coverage at issue; and may, in more than a few instances, result in a different insurance carrier than the one that initially assigned defense counsel the file being on the hook for both coverage and defense bills.

Conclusion

As the world begins to transition, particularly in the bigger cities, from ownership to a more “shared” models of living (offices, homes, apartments, bicycles, cars, etc.), the question of “who” is responsible and “who”—ultimately—pays and to what extent will become more and more an issue in litigation. Unfortunately, as is with most tech-based solutions, “sharing” is evolving so fast from both a technological and popularity standpoint that all we can hope to do is try to keep up; new “apps” with their own spins and improvements to the “sharing” space pop up almost daily.

In the ride-share space alone, besides Uber and Lyft, there is Via, Gett, Curb, Ztrip, Summon and many more. As such, it is incumbent on attorneys who litigate car accident cases to not only understand the basics of car accident law, but to also do his or her best to keep up to date with the current regulation and insurance schemes governing ride sharing. Moreover, it is important for attorneys in this space to also understand how the apps work in the real world, so that the next time you are called to litigate a three-car accident involving an Uber, Lyft and a Turo (an app which allows you to rent your personal car to another app user for a set period of time), you will know exactly what to look for.

Will Sylianteng is the managing member of Wes Litigation Group, which he founded in 2013. He focuses his practice on litigation, subrogation and recovery, insurance coverage/bad faith and e-discovery. Contact him at [email protected].