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Another Challenge for 'Ride Sharing' Services--Insurance

Another Challenge for 'Ride Sharing' Services--Insurance

If the police don't arrest drivers for those new 'car sharing' companies like 'Lyft,' than it is likely that they will receive a huge bill for their car insurance, 1200 WOAI news reports.

 

  Lyft is the talk of San Antonio, especially after Police Chief William McManus denounced the company and it's business model last week, and hinted that people who are driving for Lyft and other what he called 'rogue taxi apps' could be the victim of sting operations by police.

 

  Lyft, which bills itself as 'your friend with a car,' pairs people who want rides, generally millennials who don't own cars, with individuals who are willing to make extra money using their car to drive the others around.  The riders pay 'donations' instead of fares, and the entire transaction is handled via smart phone, with no dispatching service involved.

 

  But Loretta Worters with the Insurance Information Institute says a big problem with Lyft is that standard Texas auto insurance policies don't cover passengers who are being carried for hire, or the vehicles which are being used to carry them.

 

  "This involves all kids of added risk for insurance companies," she said.  "They don't want you thinking that you have any coverage if you pick up passengers."

 

  That means people who are riding in Lyft vehicles could find that any injuries they receive in an accident are not covered by the drivers' car insurance, and if a car is wrecked while it was being used to haul passengers for cash will end up being customers instead, because the costs of their car repair will not be covered by their policies.

 

  "These Lyfts and other types of vehicle services as of yet don't have the proper insurance coverage," Worters said.  "Even though they say they do, they don't."

 

  A policy which would allow a private car to be used as a Lyft vehicle would probably cost more than a Lyft driver could hope to make hauling customers.

 

  McManus cited insurance issues with Lyft in his 'cease and desist' order which was delivered to Lyft officials last week.

 

  Meanwhile, there is more support on San Antonio City Council for allowing Lyft and it's sisters to come into the city.

 

  Councilman Rey Saldana says he used Lyft during a recent trip to San Francisco and found the service worthwhile.

 

 "It was really innovative, I thought, you can actually rate the person who was driving you," Saldana said.

 

  He says he was not afraid for his safety, but he will "not use my personal experience to guide policy."

 

 

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