Utah Consumers Cautioned on Rideshare Apps

June 3, 2014

Smartphone users tapping into ridesharing apps for a lift should first check their insurance policies, state officials are warning.

Drivers for companies such as Uber or Lyft, who use their own vehicles, should also consult whether they’re covered in the event of an accident, the Utah Insurance Department has cautioned in recent weeks.

“Before you get in the car,” said department spokeswoman Tracy Klausmeier, “check to see if they have coverage.” Passengers should get a handle on when driver’s coverage applies, she said, because their own policies might not assume the cost of injuries sustained in the passenger seat.

Likewise, “When you are driving for these companies,” she told KSL-TV, “talk to your agent to find out if you are covered.”

Some ridesharing companies say they aren’t liable for any accidents, contending they simply provide a digital link between local drivers and passengers. It means customers aren’t covered like they would be in a taxi cab, Klausmeier says.

Earlier this month, Lyft spokeswoman Katie Dally told Salt Lake City radio station KUER that Lyft isn’t a typical transportation service, so taxi and limo regulations don’t apply. Drivers use their own vehicles, she explained, and typically work only a few hours each week. The company covers citation fees and even some legal fees for its drivers, she says.

Both Lyft and Uber say their policies include $1 million worth of coverage for drivers and passengers.

Nationwide, they are shaking up the transportation marketplace, sending state legislators scrambling to regulate the emerging tech firms.

“Some cities have put out a stop and desist order out on these companies,” Ken Olsen, president of Salt Lake City’s Ute Cab Company, told KUER. “Our city is basically doing nothing.”

Last week, Lyft said it will defy New Mexico regulators by continuing to operate in Albuquerque, a move state officials there say could garner hefty fines for the ridesharing service.

In Colorado, the companies could soon face regulations under a new legislative measure the state’s governor is expected to sign into law.

A handful of other state legislatures tried and failed this year to pass measures to oversee for the companies.

In Salt Lake City, authorities are now handing Lyft drivers citations for $75 to $100 each.

City officials are considering tweaks to transportation policy, said mayor’s office spokesman Art Raymond, such as requiring drivers to pay for a license or provide proof they’ve passed background checks, gotten their car inspected and purchased the proper insurance.

It could take a few months for any such changes to go into effect, and officials are still hashing out the potential rules, Raymond said. “We want any resident who gets in a cab or Uber or Lyft car to know if something goes wrong, they’re covered.”

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