Uber's policy on insuring its drivers will soon be taken for a test drive, as the company that runs the mobile app-based ride requesting service and a driver were served with a court summons last week from a woman severely injured after a crash near a San Francisco intersection.
Those insurances policies were said to meet brand new regulatory requirements on rideshare services introduced by the California Public Utilities Commission on July 30, which was meant to solve the longtime regulatory battle between rideshare services and local governments.
The plaintiff in the suit, Claire Farhbach, was a bystander, not a customer, and that unique twist in the injury suit has experts from the taxi industry waiting to see if Uber will step up to the plate to pay for Farhbach’s injuries, or if Uber will leave driver Djamol Gafurov on the hook for the bill.
Fahrbach was walking up Divisadero street near Hayes at quarter of midnight March 12 when Gafurov’s black town car, operating as a private taxi, collided with another car on Divisadero while turning left. One of the cars then collided with a fire hydrant, and in the words of the civil suit, "this impact caused the fire hydrant to be violently sheared from its base and propelled through the air a number of feet northbound...when the fire hydrant struck (Farhbach) with a tremendous amount of force."
The hydrant flew 81 feet from its original position, according to the police report.
The suit notes that Fahrbach sustained lacerations to her body, a fracture in her lower leg, and multiple herniated discs that “more likely than not will require surgical intervention in her future.”
Gafurov’s private taxi was operating as a “partner” of Uber, which is how the company defines its relationship to the network of drivers on its website. No private taxis or drivers are considered to be employees of Uber, as the company has repeatedly maintained. Uber provides software that lets passengers connect with drivers, like a digital dispatch, and the ridesharing service then takes a cut of the fare.
The image above is a modified police report from the fire hydrant incident, with numbers added: 1) site of the initial collision 2) where the vehicle hit the fire hydrant 3) where the hydrant hit Farhbach.
Yet that distinction has made their insurance liabilities nebulous, and local officials have taken notice. Officials at SFO last week started arresting rideshare operators in and around the airport, and the SFMTA, which regulates taxis, also considers them a problem.
The San Francisco Airport Commission and the SFMTA submitted concerns to the California Public Utilities Commission, charging that a “lack of adequate liability insurance, criminal background checks, driver training and regular vehicle inspections all decrease public safety, and although some [transportation network companies] represent that they do all of the above, the Airport Commission is asking for regulatory verification.” according to a CPUC report. “The SFMTA asserts that TNCs have a negative effect on public safety because of a lack of regulatory oversight.”
Cab drivers have long been regulated by the state, and these agencies contend that not only are rideshare companies like Uber dangerous, but the lack of insurance can be financially ruinous to pedestrians and drivers alike.
"Because it’s a pedestrian suing, that opens up a whole can of worms, and Uber may try to put the liability on the driver," said Trevor Johnson, director of the San Francisco Cab Driver's Association. A former cabbie himself, he's been on both sides of that sort of litigation, as well as in legal actions with tech companies like Uber.
Johnson is not confident the driver will be covered by his own insurance plan, because in its current pseudo-taxi company state, many insurers consider you not quite a taxi but not a private driver, putting these tech-cabbies in an awkward limbo.
"He may be left with a big judgment, and his insurance may opt to not cover him because he’s with Uber," he said.
This is backed up in our current issue of the Guardian, where Lyft driver Josh Wolf wrote from personal experience that it is difficult for Lyft drivers to obtain full insurance coverage for their vehicles.
A rideshare driver criticized Uber in a letter he wrote to the Guardian after reading that article. “I work for a limo company, I’m fully insured, the car is fully insured, but Uber takes absolutely no responsibility for its drivers,” the driver, who wanted to be identified as “Zark,” told us. He said he feared joining the ranks of self-employed cabbies, who often are under-insured. “[Uber] holds their customers in really high regard, but they don’t hold their drivers in any regard.”
Uber maintains that the drivers, and their actions, are not their responsibility.
In response to a query about the lawsuit, Uber spokesperson Andrew Noyes stated repeatedly that drivers are not employees of the rideshare company.
“Our legal team took a look at the files you sent. This is not an ‘Uber’ driver, they’re not employed by us. They’re employed by their licensed and insured limousine company,” he said. “The important thing is that theres no characterization of a driver as a driver at Uber.”
But Gafurov, the driver named in the accident, isn’t actually employed by a limo company.
Gafurov declined to speak to the Guardian, but after some digging, a disgruntled bystander, angry with Gafurov, found that he is self-employed and registered with the CPUC as the “Limo Car Service Corporation.”
Gafurov was driving with liability insurance, his CPUC registration shows -- but he not did not have excess liability insurance, which would be needed to cover extraordinary damage caused by the flying fire hydrant. The gaping hole left by the hydrant spilled water out onto all the surrounding businesses, causing intense damage, and everyone affected is seeking compensation.
Fahrbach’s lawyer, Doug Atkinson, told us the cost of the accident will be enormous.
Notably, few independent drivers have excess liability insurance.
“A lot of carriers don’t have it, because it’s expensive,” Johnson told us. “This is a case for the excess insurance, as it stands right now with that much damage and that many people after him, unless Uber steps in and helps him save the day this driver is going to be in the hole for the next 20 years.” He added, “This guy’s life is over.”
Atkinson is hopeful that getting Uber to pay that insurance won’t be a hard sell. “I’m not looking for some protracted legal battle, I want to see a company that will do the right thing, who’s saying ‘I’m revolutionizing cab driving.’”
In order to persuade the CPUC of its viability during the regulatory proceeding, Uber told them it has the very excess liability insurance that Gafurov needs, in excess of $5 million, according to CPUC documentation from an April workshop.
But having that insurance in place is different from using it to cover damages when needed. According to Uber’s partner agreement with its drivers, “Uber and/or its licensors shall not be liable for any loss, damage or injury which may be incurred” by a driver.
Asked if Uber will help Farhbach pay her medical bill, Noyes responded, “You’re writing about a specific case and I don’t think I can say much more. A professionally licensed driver is protected by their company, it’s not really my issue to weigh in on.”
Meanwhile, Fahrbach isn’t doing very well at all, she wrote in an email. Her injuries forced her to leave her two jobs in San Francisco, one at a farmer’s market and another at a cafe, and she moved back in with her family in North Carolina to recover.
"My recovery has been a slow steady process laced with many ups and downs," she said. "Having been immobile for the better part of three months has had an everlasting effect on my physical state. I will most likely be dealing with spinal problems for the rest of my life, but have tried to remain positive and grateful for the progress I have made."
Fahrbach said she doesn't have the money to cover her medical bills out-of-pocket, and this frightens her. "Frankly, if there is insufficient insurance to cover my injuries and losses, my financial future will be dismal."