In November 2016, Pennsylvania passed a bill to regulate ride-share companies,
like Uber and Lyft. The ‘ride-share’ law sets insurance standards,
fee and licensing requirements for the companies, and inspection standards
for the drivers.
The most important piece of the legislation is the requirement that ride-share
drivers must obtain insurance that recognizes they drive for Uber, Lyft
or a similar company. This closes the loop hole where a driver could forget
to tell their automobile insurance company they are driving people around
for money, allowing the insurance company to potentially deny coverage
if passengers were injured in a crash.
The new ride-sharing act requires a driver to maintain insurance through
a Transportation Network Company (TNC), which would recognize the vehicle
as being a “vehicle for hire.” The act sets forth that a driver
is required to maintain a minimum of $500,000 of liability insurance when
engaged in a prearranged ride. This would be available to protect against
losses for death, bodily injury and property damage.
The new law is anticipated to make the burgeoning field of ride-sharing
safer for consumers who have come to rely on the services. The insurance
requirements for the act can be found at 53 Pa.C.S. 57A07.
Uber Now Offering Extra Insurance Protection for Drivers
In addition to PA's new law to protect ride-share passengers in the
event of a crash, it is worth noting that some ride-share companies are
also making moves to offer their drivers with additional insurance coverage;
however, it comes with a cost to customers.
Uber has recently raised rates by 5 cents per mile in Pennsylvania and
7 other states, in an effort to have customers pay the cost of a pilot
program to provide drivers with injury protection and income security
Uber now provides Pennsylvania's 20,000+ Uber drivers with the option
of buying the injury protection insurance, which includes coverage for
medical expenses and loss of income as a result of a work-related incident.
The insurance also provides for disability income replacement and survivor benefits.
According to an Uber spokesperson, the maximum payout for a single collision
is $1 million. There is no deductible or copay for medical expenses. Coverage
applies while drivers are logged in to the app, and the cost to drivers
is 3.75 cents-per-mile.