Consumers should be aware of the rising popularity of ride sharing companies and their potential effect on insurance coverage after a car accident.
Companies such as Uber, Lyft, and SideCar provide smartphone applications that match ordinary motorists with people that need a ride somewhere and charge a portion the driver's fee for the service.
Before considering using these car companies, Rhode Island consumers should be sure to read the fine print. Sometimes, these companies attempt to avoid insurance coverage when car accidents happen.
While earning money and offering the services like a taxi company, ridesharing businesses may try to avoid a taxi company's duties by denying responsibility or liability for any injuries caused by the drivers that earn them money through their “terms of service” agreements.
Terms of service statements are a kind of contract that sets the rules for customers using the business' goods and services, like the drivers and passengers for ridesharing services. Ridesharing companies should not be able to deny liability to everyone in the world by writing it in their terms of service. If the ridesharing driver is in an automobile collision, hurts a pedestrian, or injures someone through their failure to keep their vehicle in good repair, the people who are injured by this negligence cannot be forced to follow the contract.
Rhode Island personal injury and car accident victims typically do not read or understand such boilerplate fine print. Why should such terms be valid? This may be bad public policy.
Other for profit companies are prohibited from such behavior. For example, taxi cabs and similar transporters owe substantial responsibilities to their passengers. [R.I.G.L. § 39-14-1(2); Lavallee v. Alert Ambulance Services, 854 F. Supp. 60 (D.R.I. 1994)]. R.I.G.L. § 39-14-18 requires owners of taxicab and related services to hold commercial insurance policies that meet these obligations covering bodily injury or property damage.
For now, I do not see a Rhode Island case that has addressed this issue. But it seems to me that the new for profit ridesharing companies are essentially operating similarly to taxi companies and should likewise be held to this statute and others like it.
For many years Rhode Island has followed virtually every other state in requiring that all motor vehicles registered include proof of insurance for bodily injury. This serves an important public policy of ensuring that there is at least a minimal amount of coverage available to help those who suffer Rhode Island personal injuries. Such compensation here is just $25,000.00 per injured party which is often insufficient to cover medical bills, lost wages, and the like. Hopefully, for Rhode Island consumers, the new ride sharing companies will be held to a similar standard.
