The announcements came two days after The Bay Citizen reported on concerns raised by lawyers and insurance experts that the companies’ insurance requirements would not adequately protect drivers and passengers in the event of a collision.
Lyft and Sidecar launched this summer with mobile apps that let passengers use their smartphones to hitch a ride from drivers using their own cars. Suggested donations replace set fares, and the companies take a 20 percent cut.
Lyft, which reports that it has 100 drivers, and Sidecar, which says it has given more than 10,000 rides, say drivers must have their own personal car insurance. But the state minimum coverage for auto insurance – $15,000 for injury or death of one person, $30,000 for more than one person and $5,000 for property damage – is a small fraction of what taxis and limos must carry.
In San Francisco, taxis are required to have $1 million in coverage. The California Public Utilities Commission requires that limo drivers with vehicles that carry fewer than seven people have $750,000 in coverage.
On top of that, insurers would be unlikely to cover collisions for drivers using their personal cars to make money, Pete Moraga, a spokesman for the Insurance Information Network of California, a nonprofit trade association, told The Bay Citizen. Even though Lyft and Sidecar call the payments donations, he said insurers wouldn’t see it that way.
In its announcement, Sidecar said that the company was “happy to announce that we will be adding a guarantee that covers drivers and passengers for up to $1 million.” That will be on top of the insurance held by the drivers, the company said.
Tech Crunch reported this morning that Lyft would be doing the same.