Uberx, Sidecar & Lyft Blow More Smoke

Today's lesson in sophistry comes from the dynamic TNC trio's defense of requiring their customers to sign terms or agreements waiving their liability rights ( The Warmth of the "Sharing Community" vs Lyft & Sidecar's Terms of Service) before being allowed to ride or drive in one of their vehicles.

As I've said before, excluding space travel, Uberx, Sidecar & Lyft offer the only forms of public transportation – bus, shuttle, taxi, limo, airplane or train - where passengers and drivers must waive their rights to collect compensation for negligence before getting into a vehicle. 

TNC spokesmen, while not addressing my statement directly, give four main arguments in favor of compelling their customers to sign these agreements: 

1. That the terms are standard for software companies.
2. That the TNC'S are app and not transportation companies.
3. That the liability limitations only apply to software problems.
4. That taxi apps like Flywheel and TaxiMagic also have similar terms for their passengers to sign.

Number One 

The argument is that because somebody else does something it's cool for you to do it too. (i.e. "Why should I have insurance? He doesn't.") Here the argument goes that because software firms deny liability to their customers, it's okay for Uber, Sidecar & Lyft to do the same. This, of course, avoids the question of whether or not this is a good idea at all. There are two ways in which I think it is not:

1. This is essentially a way to avoid taking responsibility for a companies' services or products. There was a time when companies were proud of their creations and backed up the quality of the things they made with guarantees. This is clearly not the case in today's "innovative" software world.

 Thanks to the TNC trio, I've started reading terms and agreements before I download anything and it's not a pretty picture. Almost all computer based companies – Apple, Adobe, Netflix, etc –  do indeed deny liability for most forms of negligence on the part of their products, services or employees.

 How does this work out in practice? A friend of mine spend three years traveling, researching and writing a book that ended up on a Mac Air. Her computer froze and the password was forgotten. It turns out that Apple will not allow the owner of a Mac to re-set her or his own password.

Since there was no way to override the password, we took her Mac to Apple's "Genius Bar" and asked them, three separate times, not to do anything that might erase the data. They said that this was extremely unlikely to happen but made my friend to sign an agreement that waived liability before they would do any work. They also promised to avoid using any procedure that might lead to losing her data. Then, the "geniuses" took the computer and erased her book.

Of course it could be argued (and repeatedly has been by her) that my friend should have backed up her work. In addition, she has recovered some earlier versions from other places and there is a possibility that people smarter then Apple's "geniuses" may be able resurrect the book.

Nonetheless, it was Apple's bizarre rule of not allowing Mac owners to re-set their own passwords that ultimately lead to the destruction of my friend's data.  Grounds for a suit?

2. In any case, the obvious difference between Apple's and Uber, Sidecar & Lyft's denial of liability is the fact that the TNC's expose their customers, not to data loss, but to injury or death – conditions from which people don't always recover.

Number Two 

The TNC'S claim that Uberx, Sidecar & Lyft are just software companies that connect passengers and drivers. 

I think the easiest way to dispute this is to note the difference between taxicabs and (for the moment) the illegal passenger transportation networks run by the dynamic trio.

Legal taxicabs will be on the streets of San Francisco regardless of whatever app or dispatching service they may or may not be using.

TNC vehicles ONLY WORK THROUGH TNC APPS. 

If the Uberx, Sidecar & Lyft apps did not exist, the TNC vehicles would not be rushing around in traffic. They'd just be private cars, mostly parked at home.

Number Three 

The TNC's came up with the argument that their limitations of liability only apply to the TNC customer's software especially for the CPUC's Party Meeting. At least I hadn't head it before.

All I can say is that this not clear from reading the TNC's terms and conditions. 

Does this sound like the TNC'S are ONLY talking software?

1. YOUR USE OF THE SERVICE.
2. 
   
3. SIDECAR DOES NOT WARRANT, ENDORSE, GUARANTEE, OR ASSUME RESPONSIBILITY FOR ANY RIDE YOU REQUEST OR PROVIDE THROUGH THE SIDECAR SERVICE, NOR DOES SIDECAR WARRANT, ENDORSE, GUARANTEE, OR ASSUME RESPONSIBILITY FOR ANY PROPERTY DAMAGE, INCLUDING TO YOUR VEHICLE, PERSONAL INJURY, UP TO AND INCLUDING DEATH, THAT OCCURS AS A RESULT OF THE RIDE OR YOUR USE OF THE SERVICE.

Or this?

LYFT HAS NO RESPONSIBILITY WHATSOEVER FOR THE ACTIONS OR CONDUCT OF DRIVERS OR RIDERS. ... RESPONSIBILITY FOR THE DECISIONS YOU MAKE REGARDING PROVIDING OR ACCEPTING TRANSPORTATION REST SOLELY WITH YOU. IT IS EACH RIDER AND DRIVER’S RESPONSIBILITY TO TAKE REASONABLE PRECAUTIONS IN ALL ACTIONS AND INTERACTIONS WITH ANY PARTY THEY MAY INTERACT WITH THROUGH USE OF THE SERVICES. LYFT MAY BUT HAS NO RESPONSIBILITY TO SCREEN OR OTHERWISE EVALUATE POTENTIAL RIDERS OR USERS. USERS UNDERSTAND AND ACCEPT THAT LYFT HAS NO CONTROL OVER THE IDENTITY OR ACTIONS OF THE RIDERS AND DRIVERS, AND LYFT REQUESTS THAT USERS EXERCISE CAUTION AND GOOD JUDGMENT WHEN USING THE SERVICES. DRIVERS AND RIDERS USE THE SERVICES AT THEIR OWN RISK.

But, then, I'm not a lawyer.

Number Four

The TNC smoke about Flywheel and Taxi Magic's terms and conditions being similar to their own is true but misleading. The difference is the difference between a legal taxi and the illegal cabs sent out by Uberx, Sidecar & Lyft. 

San Francisco taxicabs are already fully insured for $1,000,000 with primary insurance by the taxi companies. And, the driver is protected by Worker's Compensation.   If a taxicab driver is negligent and in some way harms a customer or a pedestrian, the customer is clearly covered by the company's insurance. Therefore it is unnecessary (and might be confusing) for taxi apps to also cover the same taxis.

The vehicles used by TNC drivers, on the other hand, are privately owned and covered by personal liability insurance with coverage that can be as low as $15,000 – $30,000. Furthermore, the drivers are falsely told by Uberx, Lyft & Sidecar  (in the words of the later), "Because this is ridesharing, special insurance is not required..."

However, the Personal Insurance Federation of California (PIFC) at the hearings on ridesharing last spring stated, "The issue before the CPUC is not ridesharing, but instead using a private passenger vehicle in a livery service. This is clearly not covered under a standard policy; if an accident occurs, coverage would not exist." 

(BTW. Despite the fact that the CPUC has since agreed with the PIFC's position, the TNC trio continue to give their new drivers the same fraudulent information.)

Uberx, Sidecar & Lyft, of course, now have their famous $1 million excess liability policies with coverage that "... begins when a Sidecar (etc) driver has accepted a ride through the passenger app and continues until the passenger exits the vehicle at the end of the ride."

The excess policies do not cover collision. Nor do they cover the driver or any third party like a pedestrian while he or she working as a TNC but doesn't have a customer. 

Uberx, Sidecar & Lyft have led the public to believe that the TNC driver's personal insurance will automatically take over the moment the driver drops off the customer. This is almost certainly not true for two main reasons:

1. When the TNC driver is looking for rides, he or she is still working as a commercial driver and thus: "If an accident occurs, coverage (under a personal liability policy) would not exist."
2. More important, not to mention more interesting, is the fact that personal liability insurance companies almost certainly will not insure a vehicle for personal liability if it is being used as a commercial vehicle at all.

This is based on a truism culled from hundreds of years of insurance underwriting experience. The truism question in goes, "If people can cheat, some of them will."
(See News From the Lyft Lounge).

It would often be impossible to tell if a TNC vehicle was being driven commercially or not. In the words of the PIFC, "Tracking if accidents have occurred involving such vehicles is difficult, as the insurer will not always have the knowledge that the passenger paid for transport." Or, I might add, looking for a passenger to transport.

In any case, I researched the question (see next post for details) by asking 10 different insurance companies if they would write personal insurance for Uberx, Sidecar & Lyft vehicles if they were covered by a $1 million per incident excess insurance policy. All the companies I talked to said that they would NOT write personal insurance policies for Uberx, Sidecar or Lyft vehicles – excess insurance policy or not.

This puts the TNC driver in the bizarre position of being insured ONLY while he transporting passengers. And, his personal insurance appears to be voided the moment he or she agrees to do so.

There is also a conflict between the limitations in TNC's terms of service and the $1million policies that Uberx, Sidecar & Lyft do provide

 "DRIVERS AND RIDERS USE THE SERVICES AT THEIR OWN RISK,"Lyft Terms.

SIDECAR DOES NOT WARRANT, ENDORSE, GUARANTEE, OR ASSUME RESPONSIBILITY FOR ANY RIDE YOU REQUEST OR PROVIDE THROUGH THE SIDECAR SERVICE, NOR DOES SIDECAR WARRANT, ENDORSE, GUARANTEE, OR ASSUME RESPONSIBILITY FOR ANY PROPERTY DAMAGE, INCLUDING TO YOUR VEHICLE, PERSONAL INJURY, UP TO AND INCLUDING DEATH, THAT OCCURS AS A RESULT OF THE RIDE OR YOUR USE OF THE SERVICE.

What do we believe? The assurances of CEO's John Zimmer and Sunil Paul that their insurance policies (insurance policies that they will allow nobody except the CPUC to see or read) will cover everything and everybody; or, do we believe the limitations that Zimmer and Paul's own attorneys have written into the terms that they require all their customers to sign?

In any case, excluding space travel, Uberx, Sidecar & Lyft continue to offer the only forms of public transportation – bus, shuttle, taxi, limo, airplane or train - where passengers and drivers must waive their rights to collect compensation for negligence before getting into a vehicle.