While peer-to-peer ride-sharing has been legally validated in places like California, drivers for apps like Lyft, Sidecar and UberX have not been clear on whether the combination of their personal insurance and their app providers insurance will cover their participation.
It’s a big gap for the quick-growing sector, and one all the companies are working to fix so they can keep their supply of drivers happy on the road.
Lyft said on Thursday it would cover drivers while they are running the app but do not have a passenger in their car “in order to erase any uncertainty.”
More news is due shortly, as Uber scheduled a press conference about insurance for Friday morning. The issue is particularly acute for Uber because a driver who was looking for a fare struck and killed a 6-year-old on New Year’s Eve in San Francisco.
Lyft, Uber and Sidecar are part of a peer-to-peer ride-sharing coalition around insurance announced just last month, but the fierce competitors don’t seem to be working in lockstep.
Lyft is in the midst of raising $150 million in funding, some of which has already closed, as Re/code reported this past weekend.
Here’s the full Lyft statement:
FOR IMMEDIATE RELEASE – 3/13/2014
Lyft Will Provide Protection Between Rides
Last month, Lyft introduced additional coverages including uninsured/underinsured motorist and collision coverages. We also worked closely with regulators, personal insurance carriers, and other industry leaders to found the Peer-to-Peer Ridesharing Insurance Coalition.
Historically, many personal insurance policies have had an exclusion while drivers are carrying passengers for compensation, because of greater liability created by having additional people in the car. In reviewing this exclusion language from the top insurance carriers, the vast majority of policies’ exclusions focus on the time period during which there is a passenger in the car.
Lyft’s liability policy was designed to cover the time when drivers have passengers in their cars, as well as the period when a driver is on the way to pick up a passenger. While we do expect personal carriers to cover the time period prior to carrying a passenger, in order to erase any uncertainty, Lyft will now provide additional protection. This new protection will provide backstop coverage to drivers when they are in match mode and are not providing rides. We will be rolling this out state-by-state in the days to come.
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