Last week I shared an interview with a local Lyft driver. A debate in the comments—and on Facebook—about the legality of rideshare services (such as Lyft) immediately ensued. After hearing from both sides of the issue, I’m just as confused as I was before.
On one hand, Lyft has responded to these challenges by saying its service is absolutely not illegal, and that their insurance has drivers and passengers covered. On the other hand, a local insurance agent, Michael Montag has reached out to RochesterSubway.com. He believes Lyft drivers are operating illegally – even if Lyft itself may not be illegal. I’ll post both responses here, and if you’re thinking of driving for Lyft or similar services, do your homework first…
First, here is a response from Lyft to its drivers regarding questions of insurance and legality of its service. This is John McBride, the regional Lyft coordinator:
Hey guys, I’ve noticed there have been a lot of posts and questions about insurance/legal issues recently, so I wanted to weigh in here to provide some important clarification.
1. You do not need commercial insurance to drive for Lyft. If your personal insurance company denies your claim because you were driving on the Lyft platform, Lyft’s insurance policy kicks in to cover you (please see insurance FAQ below for details).
2. Lyft is not illegal in any of the Northeast cities, and we are working with local officials in all our cities to develop ridesharing regulations that fully recognize Lyft as a Transportation Network Company just like we did in California. Read more here
3. Because Lyft and ridesharing are very new concepts, it takes time for us to educate regulators and insurance companies about how our business model works. Many people simply do not understand how Lyft operates, and mistakenly assert that we should be regulated and insured just like a taxi. You all are truly trailblazers in your local communities, and together we are showing people a totally new way to get around their cities.
It’s also important to remember that Lyft has made immense progress pushing at the forefront of the ridesharing movement to find insurance solutions for drivers that never existed before. Our $1 million liability insurance was the first of its kind. Then, we went a step further by provided contingent collision protection and uninsured/underinsured motorist protection. And most recently, we established our partnership with Metlife so that we can provide even better options for our drivers in the coming months. We know that the system is not perfect, and there is risk involved whenever you leave insurance companies to their own discretion. However, we are tirelessly working towards finding all-encompassing insurance solutions for our drivers. Our movement has made a great deal of progress so far, but we know there is more work to be done. Please let me know if you have any more questions!
Regional Lyft Coordinator
And now here’s the warning from local insurance agent, Michael Montag for Lyft drivers…
NYS Department of Motor Vehicles requires that anyone driving a vehicle for the purpose of transporting people for hire must have an E license (livery license) and the vehicle must have a livery plate. NYS law also requires that any municipality issuing permits/licensing requires workers compensation and NYS Disability.
To get a livery plate you must buy livery insurance and produce a FH1 (FOR HIRE Insurance card) in order to legally register your vehicle.
In larger municipalities such as Syracuse, Albany, Buffalo and Rochester there are additional requirements
in order to comply with their licensing permits. They have licensing fees in Rochester of $500 for the taxi plate and additional requirements to have a taxi drivers license to name only one of the requirements of the Rochester taxi squad.
Ride sharing operations such as Lyft and Uber do not require their drivers to comply with NYS law, municipal laws or NYS DMV requirements. The other issue is that the insurance companies writing the drivers personal auto insurance are not aware of the livery exposure when they drive for Uber and Lyft. If there is a claim it could be declined due to fraudulent/commercial use of the personally insured vehicle . If it is discovered they are using the vehicle for livery use they will cancel coverage.
Just because the ride share appears easy due to state of the art cell phone application it shouldn’t mean that the laws don’t apply. Mr. Cuomo, if I get paid by a cell phone app does that mean I don’t owe NYS tax????
So what do you think? Is this a case of the entrenched insurance and cabbie industry defending their turf? Or does Lyft have some serious issues to iron out if they want to keep operating in New York state? If you’re thinking of becoming a Lyft driver, or if you have a serious opinion one way or the other, help us out and drop a comment here.
Tags: Carma Carpool, carpooling, John McBride, Lyft, MGM Associates of Rochester, Michael G. Montag, rideshare, ridesharing, Rochester, Rochester NY, Sidecar, transportation, transportation alternatives, Uber, Wingz, Zimride
This entry was posted
on Monday, June 9th, 2014 at 7:49 am and is filed under Interviews, Rochester News, Transit + Infrastructure.
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