07 Sep Uber and Lyft Laws and Regulations in California
Planning to take a ride with Uber or Lyft?
With Uber or Lyft accidents being not too uncommon, you’ll need to know your way around the new Uber and Lyft laws and regulations in California.
As a resident of California, you already know that the state is home to some of the most progressive policies in the country. These laws and regulations are in place to improve road safety while protecting drivers, passengers, and pedestrians alike.
Ridesharing laws are evolving
As ridesharing apps have gained in popularity and become more widely used, so too have the regulations surrounding their use.
In order to operate a ridesharing service in California, an individual or company must register with the state’s Department of Consumer Affairs.
After registration, a business must adhere to a number of regulations. For example, drivers must have valid licenses and insurance. They must also follow traffic laws and stay within the speed limit.
While most aspects of ride-sharing law are similar across the United States, there are some notable differences between California and other states.
For example, California has a separate set of rules for taxis as opposed to ride-sharing drivers who are simply classified as “transportation network companies” (TNCs). In fact, California became the first U.S. state to establish specific Uber and Lyft laws and regulations in 2013. As per these regulations, Uber and Lyft drivers are required to:
- Undergo background checks
- Carry insurance of a million dollars
- Obtain a license from California Public Utilities Commission (CPUC)
- Adopt a zero-tolerance policy on alcohol and drugs
- Undergo training
Uber and Lyft laws related to accident insurance
Assembly Bill No. 2293 (AB 2293) was introduced to the California State Legislature in 2014. The bill would require drivers for Uber and Lyft to have a minimum of $1 million in liability insurance coverage when they are giving rides. The goal of the bill is to protect consumers from getting into a car accident with an uninsured driver.
Before the bill was passed, rideshare companies had argued that the personal insurance their drivers carried was enough when the driver was engaged in picking up and dropping off passengers.
The bill authorized a special insurance product for ridesharing drivers. Under this, the coverage would be $100,000 for personal injury and death in addition to $200,000 for catastrophic coverage.
It also offered $30,000 and $50,000 for property damage and personal liability respectively.
Who will pay in case of an Uber or Lyft accident?
In California, ridesharing drivers are required to have personal coverage that meets state minimums and also rideshare coverage. The rideshare coverage will cover any time they are logged into the app and waiting for a fare.
The law requires that all drivers have liability, uninsured motorist, and collision coverage on their personal policy. The rideshare company can provide supplemental liability or collision coverage for the driver.
In other words, Uber or Lyft drivers need to have personal insurance that will cover any personal injury or property damage as per California’s minimum insurance requirements. The minimum amount they should have
When the app is off:
- $15,000 per person for bodily injury
- $30,000 per accident for bodily injury
- $5,000 per accident for property damage
If the app is on but the driver has not picked up a ride yet:
- $50,000 per person injured
- $100,000 per accident for bodily injury
- $25,000 per accident for property damage.
What happens if the driver is online, is paired with their ride, or has picked up the passenger?
If the driver is waiting for the ride or is online, the ridesharing company’s auto insurance will cover damages in case of an accident. For instance, Uber provides:
- $50,000 per person for bodily injury
- $100,000 per accident for bodily injury
- $25,000 per accident for property damage
If the driver is engaged in picking up or dropping off the passenger, Uber will cover $1,000,000 towards third-party liability (for instance, if a passenger or other third party is injured as a result of the crash).
Ride-sharing companies will also provide underinsured or uninsured motorist bodily injury insurance and cash value of the damaged car (a deductible may apply).
You may wonder what will happen in case another driver is at fault when you are a passenger in Uber or Lyft.
If another driver is at fault, the rideshare company’s underinsured or uninsured motorist coverage will cover the driver and the riders if the at-fault driver doesn’t have insurance.
In most cases, if the Uber or Lyft driver is at fault for an accident, they are liable for damages.
If both the drivers involved in the accident are at fault, California’s comparative negligence comes into play.
Comparative negligence is a legal term used to explain situations in which an accident victim may be found partially responsible for causing their own accident.
This rule applies to cases where two or more people are involved in a collision and each person is found to be at fault.
This means that each person must take into account the actions of the other driver when determining responsibility. For example, if Person A rear-ends Person B’s car, Person B may still be held liable for some or all of the damage, even if Person A was not at fault for the collision.
If a driver’s fault is found to be 40 percent, they will be liable to pay 40 percent of the damages awarded. The other driver who is found to be at 60 percent at fault, will pay 60 percent of the damages.
However, depending on the nature of the accident, the rideshare company may be vicariously or directly liable for the accident.
The company’s liability depends on whether the Uber or Lyft driver is an independent contractor or an employee. This is one of the hotly debated topics in California and one that you should be aware of.
Are Uber and Lyft drivers employees or independent contractors?
Under current law, most cities are required to allow ride-hailing services like Uber and Lyft to operate within their boundaries. In order to do so, these services must go through lengthy licensing processes and meet a host of other requirements.
One of the issues that relate to Uber and Lyft laws in California is whether the rideshare companies’ drivers are employees or independent contractors. This issue was addressed by Proposition 22,
a ballot initiative approved by voters in California. It would repeal a state law that has been on the books since 2015, which requires local governments to allow ride-hailing companies to operate within their cities.
The initiative’s passage allows ride-hailing companies like Uber and Lyft to operate throughout California. However, they will be required to comply with local regulations and pay appropriate fees.
Independent contractors
One of the highlights of Prop 22 is that it allowed Uber and Lyft to classify their drivers as independent contractors.
These Uber and Lyft laws put requirements that drivers must meet in order to drive for ride-hailing companies. These include obtaining a driver’s license, obtaining a commercial driver’s license (CDL), and submitting to background checks and other screenings.
Proposition 22 also prohibits drivers from working more than 12 hours per day, limits their ability to work at night, and requires them to have a passenger at all times while driving.
Earnings floor
Instead of a minimum wage, Proposition 22 proposes an earnings floor based on engaged time. This is the time between the driver accepting a ride and dropping off the customer.
The time spent between rides or waiting for rides is uncompensated.
According to National Equity Atlas, as a result of Prop 22, the net earnings of drivers are $6.20 per hour and the wage floor is $4.10 per hour.
If classified as employees, drivers would earn $11 more.
Anti-discrimination
The second law is that Uber and Lyft cannot discriminate against passengers or drivers based on their race, color, religion, gender identity or expression, sexual orientation, national origin, disability, or any other characteristic protected by applicable federal or state civil rights laws.
This Uber and Lyft law was passed after it was found that many drivers would not pick up passengers with disabilities and would also cancel rides when they found out they were going to pick up a disabled passenger. The third law is that Uber and Lyft cannot refuse service to riders because of their destination. For example, if the rider wants to go to an area where there is an active shooting taking place then the driver can’t refuse.
Labor laws
As independent contractors, drivers would not have basic employment protections. In lieu of this, Prop 22 also enacted labor laws such as requiring companies to:
- provide healthcare subsidies at 82 percent of the average premium for drivers who work for 25 hours each week.
- provide healthcare subsidies equaling 41 percent of the average premium for those who work between 15 and 25 hours each week
- provide occupational accident insurance cover of a minimum of $1 million
- offer disability payments that equal 66 percent of the weekly earnings of the driver
Supporters of this proposal point out that it would free up local governments to conduct business as they see fit. Opponents, however, say that Proposition 22 would open the floodgates for unregulated ride-hailing companies to operate at will.
Proponents of this measure argue that it’s time for California to take back control over the regulation of these services. They also say that allowing ride-hailing companies to operate freely within communities would lead to greater competition and more affordable fares for consumers.
By considering drivers as contractors, Uber and Lyft argued that they were able to offer low-cost, quick rides. This is because these companies were able to maximize the drivers on the ride-sharing platforms while avoiding offering benefits that employees would get such as minimum wages or health insurance.
Court ruling
The controversial Prop 22 came to a grinding halt in October 2020 with the California appeals court ruling that Uber and Lyft must reclassify drivers as employees in California.
The judges stated that the misclassification of drivers as independent contractors caused irreparable harm as drivers are deprived of employee benefits.
However, rideshare companies are currently seeking a ballot as they received more time from the court to comply with this order.
Why is this important for rideshare passengers?
If rideshare drivers are employees, Uber, Lyft, and other companies would have greater responsibility and liability for their actions.
If the drivers continue to be classified as independent contractors, you may not get the compensation you deserve in case of an unfortunate injury as a Uber or Lyft passenger.
What other Uber and Lyft laws should you be aware of?
Uber and Lyft have specific requirements for vehicles in most California cities. While the requirements are different for each city, the following are the common ones.
- Must be a 4-door sedan, SUV, or minivan with 4 doors that can seat at least 6 passengers.
- Must have 2 to 4 working doors and seat belts for all seats.
- Must be under 10 years old (or not older than 2012 in most cases) and have less than 150,000 miles on the odometer.
- Must have California license plates.
- Have an auto insurance policy that is issued in California
- Should clear an annual inspection conducted by a licensed mechanic
- The inspection form and proof of insurance must be carried in the car at all times.
It is important to note that not every accident that takes place while a driver is waiting for a fare will be covered by ridesharing insurance. Ridesharing companies make a decision on a case-by-case basis regarding whether to cover an accident and how much they will cover.
A Lyft or Uber accident attorney is the best person to guide you if you are injured as a passenger.
Why consult a Yuba City accident attorney?
As you know by now, Uber and Lyft laws in California are complex and tricky to navigate. If you or your loved one is injured in a Uber or Lyft crash, it is important to know what compensation you are entitled to.
As experienced accident lawyers, we at the Law Offices of Steve Gimblin are well-versed in Uber and Lyft laws and offer the best guidance at every step. Our goal is to achieve the best outcome for you in case of personal injury or property damage.
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