The real story of the yellow app will be revealed soon.
The real story of the yellow app will be revealed soon.
It’s not from a rival company, such as Lyft or Sidecar, because they may be in the same boat. It’s from states who are warning passengers that they may not be covered by insurance if the driver has an accident.
New Jersey last week became the 14th state along with the District of Columbia to issue warnings about the risks of using ride-shares like Uber, Lyft, or Sidecar.
Drawn by the power and ease of summoning a personal driver at the push of a smartphone button, passengers may not think to ask what happens when things go wrong. States, prodded by traditional tax bases, say rideshare companies may not be providing sufficient coverage. The budding industry says that’s not true and they are being targeted for providing a competitive service.
Consumers, apparently, are caught in the middle.
Jason Herrera knows this only too well. He and a co-worker survived an accident in an UberX car that left them with injuries and unpaid medical bills.
“You buy a car, it comes with a warranty, you go step in a cab, you’ve got coverage,” he told NBC Bay Area.
I stepped into an Uber car and I have to question whether or not I’m going to be covered if there’s an accident?
“I stepped into an Uber car and I have to question whether or not I’m going to be covered if there’s an accident?” he said.
Back on September 25th, 2013, co-worker Nikolas Kolintzas thought Herrera was dead. He was unconscious. Blood was coming from his mouth and head.
The pair were in San Francisco for a tech conference. Both had used “Uber Black” in the past, which sells rides from licensed chauffeurs of black sedans and SUVs. “UberX” was the hot startup’s latest, cheaper offering.
There’s a few reasons UberX costs less: a regular person can become an UberX driver; they’re not licensed chauffeurs; and they use their own cars. UberX drivers can also use their existing personal auto insurance policy. They’re not required to get commercial liability insurance. So if an UberX driver gets into an accident, an insurance company can deny the claim.
Taxi companies say rideshare companies cut corners, leaving passengers at risk. A lawsuit filed May 21st by Connecticut taxi and livery firms asserts that Uber and Lyft “prey parasitically on existing taxi and livery services.” To highlight potential risks of using rideshare services, The Taxicab, Limousine & Paratransit Association, representing 1,100 taxicab companies, has launched the “Who’s Driving You?” campaign.
“They do not submit to regulation,” and their insurance protections are “inadequate and unsafe,” said Dave Sutton, a spokesman for the initiative.
States and municipalities are scrambling to figure out how to deal with fleets of unregulated independent contractors picking up and dropping off travelers for money on their streets. Three states, California, Colorado, and Illinois, have advanced bills to create new rideshare specific regulations. Colorado’s rules await the governor’s signature. The Illinois measure is expected to reach its governor’s desk soon. But even California’s, which passed the insurance commission in the assembly, is still under active negotiation.
California, Connecticut, the District of Columbia, Idaho, Kansas, Maryland, Michigan, Minnesota, Nebraska, New Jersey, New Mexico, Ohio, Rhode Island, Tennessee and Utah have all issued warnings about possible insurance risks from using rideshare services.
Meanwhile, the burgeoning industry says taxi companies are trying to suppress competition.
They didn’t evolve, they didn’t compete… they’re playing games to protect their monopolies.
“They didn’t evolve, they didn’t compete. Now rather than catch up they’re playing games to protect their monopolies,” said Uber spokeswoman Nairi Hourdajian. She called the Connecticut lawsuit “baseless.” Lyft said its assertions were based on “misinformation.” Margaret Ryan, a spokeswoman for Sidecar, another rideshare company, said its safeguards make it as safe, if not safer, than a taxi.
Livery industry mudslinging was the farthest thing from Kolintzas’ and Herrera’s minds as their concussions wore off. Instead, they got another shock. When they filed a claim with the driver’s insurance company, as instructed by Uber, the driver’s insurance company refused to pay their medical bills, asserting that the driver was “driving for profit,” according to the lawsuit they filed against Uber.
The suit claims unspecified compensatory damages for medical expenses, wage loss, breach of duty, and general negligence.
“There’s no insurance gap at all on any trip on the Uber system,” said Hourdajian, who declined to share dollar figures on claims paid. She said the company’s $1 million policy (Lyft and Sidecar have similar policies), provides enough coverage in case a driver’s personal insurance does not. In contrast, said New Jersey Department of Banking and Insurance spokesman Marshall McKnight, many municipalities require taxis to carry $300,000 in coverage. Sidecar’s Ryan said the company is not aware of any case where insurance has failed to cover injury or vehicle damage.
But states say the rubber has yet to hit the road on how well passengers are protected under the rideshare companies’ additional measures.
“Being covered by different policies for different uses of the vehicle is a new concept that has not been tested under our state’s laws and in our courts,” said New Jersey Insurance Commissioner Ken Kobylowski in a statement.
Hourdajian says Uber’s commercial ridesharing insurance policy has been in place since its launch in early 2013.
“It has absolutely been tested — and the system works,” she said.
Even if there is an insurance gap on the part of a rideshare driver, other protections may apply to keep passengers from having to pay for any injuries out of pocket, industry experts say.
Passengers who also own cars will have their auto insurance follow them into a rideshare car, said Kara Cross, general counsel for the Personal Insurance Federation of California, an industry group. And depending on their state, passengers’ medical expenses may be covered up to their plan limits by their policy’s Personal Injury Protection, depending on their state’s regulations, said Progressive Insurance spokesman Jeff Sibel.
Of course, normal deductibles and limits apply.
“The onus is on the passenger to ask the right questions,” said Insurance Information Institute spokeswoman Jeanne Salvatore.
However, one thing passengers may not easily be able to discern is the driver’s past record.
In an undercover investigation, NBC Chicago hired several UberX drivers and ran their own background checks on them and found numerous tickets and a questionable driving history. One driver had 26 tickets. NBC Los Angeles got an ex-con hired as an UberX driver, even though she had priors going back two decades, including burglary, drugs and assault.
“There are felons getting through. People that should not be driving are driving for hire,” said the taxi association’s Sutton.
The rideshare services say their background checks are conducted by third parties and can exceed what’s required of taxi drivers. Applicants are screened for their driving history and a criminal records check is run, which includes county and state level databases, as well as the national sex offender registry.
Despite the assurances, Kolintzas and Herrera are still waiting for someone to take responsibility for their medical bills. Kolintzas continues to suffer from anxiety problems, said their attorney, Li. Though Uber has a PDF of their insurance policy posted on their blog, Li said Uber didn’t make that information available at the time of the accident and she hasn’t gotten proof the policy was in effect when her clients were injured. Uber declined to comment on the case, citing the pending litigation.
Even after their experience, Kolintzas and Herrera have remained Uber customers. They’ve just gone back to using Uber Black. That way, Li said, they know their driver is carrying commercial driver’s insurance.
Over the past week or so there has been much discussion amongst drivers about Hailo’s application for a Private Hire licence. There has been some misinformation and even scaremongering. We’d like to take the opportunity to dispel the myths and set the record straight. We have spoken to literally hundreds of drivers personally and will continue the dialogue to get feedback and prevent people from getting the wrong end of the stick. Meanwhile, here are some answers to common questions:
Today, passengers have a number of apps on their phone to get them a vehicle. If they choose a taxi but can’t get one on Hailo, it is a fact that they will open other apps that don’t offer taxis to get a car. That passenger may then be lost to the trade forever. By giving people a secondary option for a private hire car we are keeping that passenger on an app where taxis are the first choice.
All that has happened so far is that Hailo has applied for a Private Hire Operators licence. It has not yet (as at May 28th) been issued by Transport for London. No launch date has been fixed.
Of course not. We stress that taxis will continue to be front and centre of Hailo’s offering and the default option for the passenger.
These are early days and our next task is to provide executive cars that corporate accounts have said they need in order to use taxis in their businesses, thus getting more of the corporate work that cab drivers have always told us they want.
Going forward, whilst taxis will be the first thing people see when they open up the app, we may offer a broader choice of vehicles as passengers and businesses require so that they keep using Hailo and thus have a smartphone app that has taxis as the first choice. More people using the app means more work for taxis.
We are still finalising the details and will share them closer to launch, but taking some of your ideas on board already, if possible we would like to involve licensed taxi drivers – be they Knowledge students, existing drivers or ex-drivers.
Yes. Hailo is actively trying to win corporate business back to black cabs and we launched the Hailo for Business service recently to develop this faster. Corporate accounts want executive-class cars as part of their requirements – and winning business is much harder if we don’t provide this service – as radio circuits have shown.
No, if passengers request a taxi they will get a taxi. If there are no taxis available, then passengers can choose to look for another option.
No. Unlike the radio circuits, it will always be the passenger’s choice. If people ask for a taxi, they’ll get a taxi.
The data shows that Hailo continues to provide a very strong service and the overwhelming majority of drivers continue to take Hailo jobs as always. There is no doubt that some drivers have expressed their concerns about the move, and we respect this, but many realise that a stronger Hailo means more work for them and the taxi industry.
ComCab drivers using other taxi apps
Over the past couple of years a number of ComCab drivers have taken to downloading and using a variety of third party taxi apps, including Hailo, and other similar apps.
ComCab has always taken a relaxed approach to this, knowing that a driver can do what they like on their own mobile phone, including downloading and using other apps. Our view was that provided the use of such apps does not interfere with the workings of the circuit, or the interests of our customers and drivers, we were really not too worried.
More recently however there has been an increasing sense of confusion among our account customers about drivers who are on ComCab whilst using another app. We have also seen a rise in complaints regarding drivers using other apps whilst fulfilling a ComCab account trip and ComCab taxis carrying branding for other apps, again most commonly this has been Hailo branding.
Now, we find the confusion and anxiety from our customers and our drivers has dramatically increased since the announcement by Hailo of their apparent intentions to offer private hire services over the Hailo app and to use this to target corporate account customers.
Irrespective of anyone’s view on that decision, many ComCab drivers who were using Hailo now feel the service no longer represents their interests. Our customers are now more uncertain than ever about the position of a ComCab driver who also uses the Hailo app. The fallout from this change of Hailo’s position means we are forced to take a firmer compliance line regarding third party apps going forward.
Therefore, with effect from 1” June 2014, ComCab will consider the use of any other taxi hailing app, and the carrying of any other taxi app or service branding, as conduct prejudicial to the interests of the circuit, its drivers and its customers. Any drivers found using another taxi hailing app, or carrying any other app stickers, logos, seats ads or other branding may find themselves subject to compliance proceedings and suspended from the ComCab service while that process takes place.
ComCab is enjoying good growth in job numbers from major account clients. This benefits our drivers. We cannot afford to risk that work by confusing our customers with contradictory branding and the impression that ComCab drivers are not entirely focussed on servicing our important and loyal clients. We do not want the ComCab brand tarnished by the decisions of others or confused with any account offering by Hailo or any other app operator.
Of course, you can still benefit from all the work generated by our own ComCab taxi app – this is work which comes direct to your in-cab MDT without the need for you to download any app or pay any cut of the fare to us.
We have received a lot of feedback from ex-Hailo drivers on this subject and we believe the majority of our fleet support this position.
May I take this opportunity to thank all our ComCab drivers for their ongoing loyalty, support and coverage of our major account work.
General Manager – ComCab London