The emergence of Transportation Network Companies (TNCs) transformed the way people think about taxi services, ridesharing, and transportation. TNCs, also called “ridesharing companies” use online platforms to connect passengers with drivers of non-commercial vehicles.
At a glance, the benefits of these companies, such as Uber, Sidecar, and Lyft, seem endless: lower transportation costs for groups of passengers, less fuel emissions, traffic reduction, and even protection from DUIs.
While TNCs initially received much positive feedback, traditional taxi companies and other opponents of the new ridesharing industry expressed a multitude of concerns. One of these matters is insurance coverage.
If you’ve ever used a ridesharing company, you probably didn’t think about the possibility of an accident. Unfortunately, many TNCs assert that their drivers aren’t legitimate employees, effectively releasing the actual company from any responsibility for a serious accident.
What This Means for Your Rights as a TNC Passenger
In November 2014, Houston passed an ordinance that allowed ridesharing companies to operate legally within the city. Before this change, TNCs were essentially unlicensed taxi services.
If Houston officials stopped there, injured Uber passengers would only be covered by the driver’s personal insurance policy. But most personal insurance policies refuse to pay for damages when the vehicle is used to provide rides for hire, leaving passengers without the insurance to cover potential damages.
In response to growing concern, Houston also implemented an ordinance requiring TNC drivers to carry a minimum of $1 million in car accident coverage per collision. The coverage must insure the passenger from the moment the driver accepts the job until the passenger reaches his / her destination.
Ridesharing companies must also buy the minimum amount of accident coverage for private drivers. At this time, drivers in Houston must have at least $30,000 per person and $60,000 per accident in insurance coverage.