Ridesharing apps like Uber and Lyft are a relatively new phenomenon. While both companies are approximately a decade old, the use of rideshares has become a major aspect of American life in recent years. Now that most large cities have allowed these companies to operate within their limits, the rideshare phenomenon continues to grow.
Ridesharing has not only altered the way we get around, but it has also impacted other aspects of life in unexpected ways. The introduction of a third-party application onto the roadways complicated issues surrounding liability and insurance coverage in motor vehicle accidents.
Many states were slow to address the significant changes that rideshare apps brought. However, in 2015 Colorado was the first state in the nation to pass sweeping legislation to regulate the rideshare industry. This legislation is known as the Transportation Network Company Act.
The Transportation Network Company Act, or TNCA, uses a number of definitions; being aware of them can be helpful in understanding how the statute impacts the rideshare industry in Colorado.
- Transportation Network Company: a corporation, partnership, sole proprietorship, or other entity operating in Colorado, that uses a digital network to connect riders to transportation network company drivers for the purpose of proving transportation.
- Driver: A person using their personal vehicle to provide rides for those matched through transportation network companies' mobile app or online portal.
- Prearranged Ride: A period of time that starts when a driver accepts a requested ride through a digital network, continues while the driver transports the rider, and ends when the rider departs from the vehicle.
- Services: The provision of transportation by a driver to a rider with whom the driver is matched with by the transportation network company.
Overview of the TNC Act
Until the adoption of the TNCA, the regulations on ridesharing were murky. According to the transportation network companies, they were exempt from taxi regulations because they did not actually serve as a common carrier. Instead, they operated a digital platform where they facilitated matches between riders and drivers willing to take them where they want to go. While Uber and Lyft made every effort to distinguish themselves from taxi services, it remained unclear whether cab regulations applied or not.
The TNCA changed all of that. By passing comprehensive regulations targeting transportation network companies and their drivers, Colorado has made a clear distinction between ridesharing and taxi company regulations.
The TNCA clarified the insurance requirements both for drivers and the companies themselves. They introduced a set of standards that drivers are required to meet in order to be eligible to provide rides.
How it Impacts Rideshare Drivers
Colorado's rideshare laws have had a notable impact on Uber and Lyft drivers. While these regulations require additional requirements a driver must meet, they also require the companies to carry substantial insurance coverage on their behalf.
Every transportation network company must maintain proof of insurance with the State of Colorado. The TNCA requires these policies to cover up to $1 million in liability damages “per occurrence for incidents involving a driver during a prearranged ride.” Both Uber and Lyft provide up to $1 million in liability coverage, $1 million in uninsured motorist coverage, and $50,000 in comprehensive coverage per incident.
The language of the statute is important, as the $1 million policy limits are not extended to all drivers at all times. The limits on these policies are reduced dramatically for drivers that have their rideshare app active but have not yet picked up a passenger. These policies do not apply at all to drivers that are not using the app to actively seek riders.
The driver must also have insurance coverage of their own. Most insurers require special policies that include rideshare activities. The failure to obtain this additional coverage could leave drivers personally liable for accidents.
Soliciting Rides Outside of the Digital Network
The statute also makes it clear that drivers may only provide transportation services for riders they are matched with through their app. This prevents so-called “street hails,” where drivers would solicit or accept on-demand rides from individuals waiting nearby. This is an important distinction from taxi companies, which are allowed to accept rides on-demand.
There are strict eligibility requires for all prospective drivers. Transportation network companies must ensure that their drivers comply with each of these requirements or face fines.
Only licensed drivers can accept rides for a transportation network company. Drivers without a license or suspended driving privileges may not participate. All drivers must also be at least 21 years of age.
In addition to a valid driver's license, a prospective driver must also hold proof of automobile insurance for the vehicle they intend to operate. The statute also requires proof of a Colorado vehicle registration, which means out of state vehicles may not be used for rideshare purposes in Colorado.
A driver must also pass a medical exam to be eligible to drive. The examination must be completed by a licensed medical practitioner working as a doctor of medicine, a physician assistant, a nurse practitioner, or clinical nurse under the supervision of a physician. A driver that does not obtain a medical examiner's certificate or waiver will not be eligible to drive.
Finally, all drivers must pass a criminal background check. Any person convicted of fraud, unlawful sexual behavior, an offense against property, or a violent crime may not serve as a driver.
There are certain regulations state law requires of these transportation network companies. Each company must implement an intoxicating substance policy for their drivers as well as regulations prohibiting any shifts longer than 12 consecutive hours.
The company must also do more than ensure the health of the driver. They must also arrange for an annual safety inspection of the driver's vehicle. This safety inspection must review the vehicle's tail lights, brakes, horn, bumpers, and other parts. Additionally, each vehicle must have four doors and can be designed to carry no more than 8 passengers.
How it Impacts Rideshare Customers
This bill also provides some specific rights for rideshare customers. It sets out requirements guaranteeing a rider the right to see the fees before they agree to the ride. Additionally, they are entitled to an estimated fare and a receipt. This receipt not only must list the total fare but also identify the driver as well.
These rules are also designed to protect the private information of the rider. By statute, transportation network companies may not transfer or sell any personal identifying information belonging to a rider.
Outside of these rights, the primary impact these regulations have on a rideshare customer is the guaranteed liability insurance coverage should their driver cause an accident. Not only do riders involved in a crash have access to up to $1 million in liability claims should the rideshare driver cause a crash, but they could also pursue a similar claim if the other driver lacks adequate coverage.
What It Means For Others on the Road
The insurance requirements under the TNCA also directly affect motorists that share the road with rideshare drivers. Prior to the enactment of the TNCA, dealing with insurance companies after a rideshare collision was challenging. Often the insurance companies involved would point to each other instead of taking responsibility for a claim.
Under current law, it is clear when the company has a responsibility to provide coverage. However, the status of the rideshare driver will determine the maximum compensation that could result from a successful claim. If the driver was in the process of transporting a passenger, a person injured in the accident could recover up to $1 million from the rideshare insurance policy.
Motorists injured by negligent rideshare drivers are not out of luck if the driver was not carrying a passenger. The insurance coverage available in these situations is much lower, which could leave an injured driver with out of pocket expenses.
Problems can arise in accidents with serious injuries when the driver was not actively using the rideshare app. In these situations, the injured motorist is limited to pursuing a liability claim on the driver's personal policy. If that driver has allowed their policy to lapse or the limits do not cover the full amount of damages, an injured motorist could be on the hook for paying for their medical expenses themselves.
How a Colorado Rideshare Lawyer Can Help After an Accident
The adoption of the TNCA represented a landmark shift in the way state governments regulate the rideshare industry. Since Colorado adopted this legislation, several other states have followed suit. Additionally, many large cities have also enacted their own ordinances governing rideshare use within the city limits.
If you have suffered an injury in a rideshare accident, you could be entitled to monetary compensation. Whether you were a passenger or operating another vehicle, the negligent acts of the rideshare driver could allow you to pursue a liability claim.
Experienced legal counsel provides you with the best chance of obtaining the financial compensation you deserve. To get started, contact accidentdenver.com right away at 303-642-8888 to schedule a free consultation.