Two agents from the same insurance company gave TNC driver different answers on whether they could provide coverage. (Deborah Svoboda/KQED)
A Lyft vehicle on the streets of San Francisco. (Deborah Svoboda/KQED)

In November we reported on the widespread confusion over insurance for ride-share drivers who work for companies such as Lyft, Sidecar and UberX. These companies use smartphone apps to connect ordinary car owners with those seeking a ride. The growing industry has given the taxi industry fits, siphoning off both customers and drivers. In San Francisco, where it has long been notoriously hard to find a cab, the transportation network companies, or TNCs for short, have stepped in to fill the gap.

One downside for both passengers and riders, however, is uncertainty over insurance coverage if a TNC driver gets into an accident, as several have in the past few weeks. Here’s what we found:

  • Ride-service companies like Lyft and Sidecar say drivers’ personal insurance policies will cover some claims. But the insurance industry says the policies won’t provide any coverage.
  • The insurance industry says ride-service drivers will have to buy commercial insurance to be covered when they’re driving for hire and maybe even when they’re not.
  • At least some ride-service drivers are keeping their status secret from their insurance companies because they’re afraid of losing coverage.

These issues might take on increasing urgency as more and more drivers sign up and accidents occur. A  Lyft driver was involved in an accident in San Francisco on Friday, and an UberX driver struck and killed a 6-year-old girl on New Year’s Eve.

One question we posed in the past: Are ride-service drivers at risk of losing their insurance?

Last week on the Lyft Lounge, a Facebook meeting area for drivers, one member posted a cancellation notice she received from Geico. The termination  was for “commercial use of your 2012 Toyota Prius.” The posting has sparked a long online discussion among Lyft drivers. Wrote one fellow Lyft driver in response:

“No one, I mean no one told me my insurance would have a problem with it. What’s Lyft’s response to the fact that serving for them may end up with us losing insurance and possibly our livelihood?”

Last year, journalist Josh Wolf, writing for the San Francisco Bay Guardian, reported on a similar cancellation of a Lyft driver’s insurance.

Lyft has not gotten back to us with a response.

Keeping TNC Status a Secret

Because of the fear over such cancellations, at least some ride-service drivers have kept their status a secret from their insurance companies. Several Lyft drivers we spoke to previously said they did not want their names used for this reason.

“I have heard about people being denied coverage because it was discovered they were driving for Lyft, and therefore their personal insurance policy would not be renewed, or canceled,” Lyft driver Dan told us.

Said another driver: “I don’t think I should let my insurance company know because I’ll probably get dropped.”

And another: “I figure the less they know the better.”

I spoke Monday to yet another Lyft driver about the issue, and again he would talk only on the condition of anonymity out of fear of having his insurance canceled. This driver said he noted one bit of advice on the Lyft Lounge recently: If you get into an accident, end your ride immediately and turn off your app, so you cannot be identified as a ride-service driver.

He also said he displays the famous pink mustache that identifies Lyft vehicles only when picking up a passenger, then throws it in the back seat, against both Lyft rules and state regulations. He does this to lessen the risk of being identified as a TNC driver and also because he does not want to get hassled by taxi drivers.

There does seem to be a distinct feeling among some TNC drivers that it is bad practice to go public with your professional driver status. On the Reddit Uber Drivers subgroup, someone recently put up a post titled: “Do not mention your work as an Uber Driver on any social media. Good way to get coverage denied in the case of an accident.”

Can You Get Insurance for TNC Work?

Under rules adopted last September, the California Public Utilities Commission requires ride-service companies to carry at least $1 million in liability insurance for their drivers. But it remains unclear just when that insurance is in effect.

Graham Archer, the attorney for Syed Muzaffar, the UberX driver involved in the fatal accident on New Year’s Eve, says his client had driven to San Francisco with the express intent of serving UberX users and had already completed one trip.

But although Muzaffar was logged in and awaiting another customer, he wasn’t on a call at the moment of the accident, so UberX does not consider him covered under its policy.

The companies’ commercial insurance won’t cover the personal use of a TNC vehicle — for instance, when a driver is running personal errands or going on a road trip. There is a real question as to whether ride-service drivers can obtain personal insurance if they tell insurance companies the true nature of their intended use of the vehicle. During my reporting last year, I contacted the American Automobile Association and Allstate to see if they’d insure me for the personal use of my car if I also wanted to use it for transporting paying passengers as a TNC. Both said they wouldn’t.

“If they discover that your car’s being used that way, then that’s going to raise the red flag for any claim,” an Allstate broker told me. “Tracking if accidents have occurred involving such vehicles is difficult, as the insurer will not always have the knowledge that the passenger paid for transport.”

The recent experiences of two taxi drivers who wanted to switch to UberX also shows how hard it is for TNC drivers to get insurance coverage. Each uses Uber Taxi, a service that connects passengers with regular cabs. Each said they considered driving for UberX after learning Uber offers financing for that service’s drivers to buy new vehicles. But each said their plans hit a roadblock when they found they couldn’t get insurance for the new cars.

One of those drivers was John Han, who drives for Yellow Cab in San Francisco.

“I couldn’t find anybody who would insure an UberX vehicle,” he says. “When I talked to my personal insurance company, I was trying to be very honest. I said I had just been approved for a car loan but wanted to work for UberX. They said they can’t insure that.”

Han says he was referred to a company that provides limousine insurance, but the broker said she couldn’t find anyone to cover an UberX vehicle.

“You can’t really insure a car as both a personal vehicle and commercial at the same time,” says Han, who has written about taxi issues for his own blog. “Someone might create that kind of package. But it doesn’t exist now. The insurance industry is under no obligation to insure something just because the CPUC says it’s OK.”

“The only way I can do UberX would be to lie to my insurance company. I didn’t want to do it that way.”

Bill Clark drives for Luxor Cab and was also ready to try driving for UberX. He says he was part of a group of about 25 cab drivers that Uber was encouraging to convert to its ride-service platform. He says he was turned down for insurance when he tried to buy a new car for his planned UberX work.

“I went to Geico, filled out an application and told them I was going to transport people,” he says. “The application was declined as ‘undesirable.'”

Like Han, he then tried to get commercial insurance, going through a broker, and couldn’t find anyone to insure a TNC vehicle. “They had never heard of TNCs,” he said.

No Answer to Request for Advice

Clark then emailed the following to a contact at Uber complaining that he couldn’t obtain insurance:

I would like to discuss some concerns that have come up in researching the insurance for TNCs. According to the law the requirements to operate a TNC vehicle are: The California PUC requires personal insurance from the driver and excess liability insurance from the TNC (UBER). However when I applied for personal insurance from Geico and I truthfully represented the use of the vehicle, they declined, stating that my use was commercial. It also seems they do not offer the type of commercial insurance I would need.

You can see my dilemma. It seems to me the only way to comply with Uber by getting personal insurance would be to misrepresent my use of the vehicle, which I do not feel comfortable with. My conclusion from this indicates that if there were claims against a TNC driver and the insurance company found out that the true use of the vehicle was falsified, they would deny coverage.

The Uber rep told Clark he would see what he could do. Clark then wrote a followup email saying he was still excited about working for Uber, but that the insurance matter needed to be resolved.

He says he never got any answers and he now assumes the  other cab drivers in his group who obtained insurance for TNC work told insurance companies their new cars were for personal use.

Musing about his quest to leave the taxi business, Clark says, “I could get a brand-new Prius, drive any time I wanted to, and just make money. That’s like a dream; too good to be true. In fact, it was too good to be true. You can’t get insurance on them.”

Obviously, many people are obtaining insurance on vehicles for TNC use. But it’s unclear how many insurers, if any, know about the insured’s ride-service work and would balk at coverage if they found out. Almost all personal insurance policies contain an exclusion for commercial use of  vehicles.

“Many insurers don’t know their customers are involved in these kinds of program,” says Pete Moraga of the Insurance Information Network of California. “If these drivers aren’t telling their insurers, there’s no way for them to know.”

Meanwhile, the California Department of Insurance has issued a warning to TNC drivers about possible gaps in insurance coverage.

I sent Uber a number of questions about insurance, including one asking the company if it could name any personal insurers who were willing to insure a TNC vehicle. The company would not answer any of those questions on the record.

Update Jan 22: Uber now tells us it did respond to Clark in a phone conversation. Clark, however, says that while an Uber rep did call him, he merely listened to Clark’s concerns, saying he would get back to him with a response. But Clark never heard back with any answers.

Update 2: Kara Cross, general counsel for the Personal Insurance Federation of California, an industry group made up of State Farm, Farmers’, Progressive, Allstate, Liberty Mutual, and Mercury, contacted us with some insurance implications for TNC passengers.

Cross says that if you are injured as a result of riding in a TNC vehicle, you can draw on the $1 million-per-incident coverage TNCs are required to have, but only if the TNC driver is judged to be at fault. If the other vehicle is judged to be at fault, you will have to rely on that driver’s insurance, which will very likely cover a much lower amount than $1 million if it is a private vehicle.

How Many Ride-Share Drivers Are Hiding Status From Insurers? 9 January,2015Jon Brooks

  • TerryGauchat

    This is insurance FRAUD; remember that the auto insurance companies can afford much smarter lawyers than a ride-share Driver. Cancellation of policy is the least of their worries. Drivers are at risk for hundreds of thousands of dollars of liability for injury to their paying passengers and Drivers’ personal insurance will likely fight all claims even when the Driver was “off the clock”; including claims for injuries and damages to self, own vehicle, non-paying passengers, other people, vehicles, etc.).

    Vigilant police officers taking reports at the scene of an accident will note the “pink mustache”, or at least ask the Driver and Passenger if they are in a paying ride-“share” activity. Lying to an Officer of the Law is grounds for denial of insurance coverage and worse. Cell phone records can be subpoenaed.

    In other words, Drivers have no clue what they are putting on the line… This response quoted from the article is very poor and incitement to commit fraud: >>This driver said he noted one bit of advice on the Lyft Lounge recently: If you get into an accident, end your ride immediately and turn off your app, so you cannot be identified as a ride-service driver.<<

    • brothenberg

      The drivers have a clue.. it was just lucrative enough to keep doing it until both companies kept dropping their pants on the rates and have made the entire thing a fist bumping $4 ride joke.. dropping someone off for $5 ride in my $40k car is not going to sustain..

      • ClaimsAdjuster

        UberX is now charging $1.63 per mile in Seattle. Their strategy must be to put the taxis out of business before the Seattle City Council makes the UberX/Lyft/Sidecar cabs carry insurance that will actually provide coverage.

    • brothenberg

      Not liability.. comprehensive and collision.. liability is the only thing covered.. there is also no on/off shift.. Uber/Lyft are merely lead generation companies.. when you are not under a ride.. its the same as being in an office on your butt waiting for a lead.. you are a citizen untill you are under a ride.. anything that happens is on your own.. unless you are enroute or under fare you are not covered under the TNC insurance.. which is only valid if your personal insurance works.. which it doesn’t.. since no valid personal insurance covers ride sharing.. so much like napster.. when the rides are “completed” and paid for they are all illegal and fraudulent.. yet the TNC’s only have to make sure I have valid state insurance to send me a lead.

      • ClaimsAdjuster

        But the driver’s insurance isn’t valid and the TNCs know it.

        Here is Travis Kalinik before Uber decided to compete with Lyft by starting UberX:

        “A Lyft driver does what a driver on Uber does,” says Travis Kalanik, the CEO of Uber. “The only difference is they don’t have a license and they don’t have commercial insurance.”

        • Laurel Denver

          Didn’t that quote come out of his mouth BEFORE he invented UberX, which is identical to Lyft in every way, except the passengers sit in the back usually and the forced conversation and rapport isn’t a requirement. It’s still some regular dud with a regular license and a regular car and regular insurance give a ride for a lot less than the Uber black car or a taxi.

          UberX hit the ground running, and is probably Uber’s largest portion of business now. I mean, why would anyone take a black car if you can take a brand new prius with a nice driver for a third the cost? You’d only take a black car or a SUV if you had a particular need in that direction.

          Kalanik has every intention of underpricing Lyft and taking over the market. Uber is about 25% less than Lyft in San Francisco right now. (That is, unless the surge pricing is in effect, and mostly, that makes it at worst the same price. The higher surges you read about are far rarer, so UberX gets away with them. If 90%+ of the people aren’t effected, it’s a good way to raise income.)

          • leftoversright

            I think that was the poster’s point, Uber’s Travis knows full well that his drivers aren’t covered and decided to go ahead and not only encourage but profit from TNCs.

      • Barry Korengold

        Personal insurance WOULD cover ride-sharing, but this isn’t “ride-sharing”. It’s for profit, on demand local passenger transportation (taxi) service, that charges primarily by distance (State and Federal Code definition of “taxi service” ). So why is it OK for them to compete directly with an already existing and highly regulated taxi industry, but not have to follow the same rules? Cause they’re “Your friend with a car”? These companies and their drivers are misrepresenting what they’re doing, to avoid regulations and proper insurance.

    • brothenberg

      FYI.. Accident and issue free… over 2600 rides here.. since 4/2013.. (Lyft Launch LA).. have done Lyft, UberX, and Sidecar, Wingz/tickengo, and some others.

      • dukeduk

        Hmmm.. 2.6k rides in 9 months or like 10 rides 7 days per week with no rest? Yeah right, but you forgot to mention that you’ve been lying to your auto insurance company.

        • pitbullstew

          details details details….lol

        • brothenberg

          Who said no rest? I held a fulltime job too! Nobody lied.. when I started nobody had any clue what TNC was.. they still don’t.. or someone would be cleaning up with a citizen taxi insurance plan that covers this stuff.. there is money to be made if someone created the hybrid insurance plan! 2-3000 drivers per TNC x 2-3TNC providers is a ton of insurance contracts..

          • brothenberg

            I was one of the first in LA.. .. Lyft, UberX, Sidecar.. Wingz.. blah blah blah.. never had an accident or issue to lie about..

          • dukeduk

            Lest we forget, Lyft driver hit an elderly pedestrian while on the “job”
            last Fri, 1/17. Driver had a passenger and Lyft promptly threw the
            driver under the bus by FIRING her:

            Lyft Driver Hits Elderly Woman in San Francisco Crosswalk


          • brothenberg

            That injury would be on his personal claim.. since the passenger was not affected.. the claim will go under the radar most likely.. there would be no reason to disclose there was a paid fare passenger in the car. Lyft would only step in if the liability of the initial injury claim was beyond the personal insurance claims limits.

          • dukeduk

            Perhaps but not when cops are called and they notice the silly pink mustache and do the routine police report including witnesses which the insurance company will ask for. BUSTED…

            Poor driver was crying and got “deactivated” and thrown under the bus by Lyft. I do feel sorry for the poor driver and she like others didn’t think about the consequance of her mistake and good ol Lyft not backing her but promptly fire her.

          • ClaimsAdjuster

            Lyft has its principles. No insurance is a firing offense but invalid insurance is ok.

          • dukeduk

            Not quite…

            Cops are called especially when an accident involves injury and do the investigation as part of police report including talking to everyone including witnesses who in this case noticed the silly pink mustache and all. Insurance companies always ask for the police report.

            Poor driver was crying and I feel sorry for her as I’m sure she and her pals working for Lyft didn’t expect accident like hitting an elderly pedestrian.

            As for Lyft, they promptly threw the driver under the bus by “deactivates” AKA FIRED her.

          • ClaimsAdjuster

            What else could Lyft do but fire the driver? The vehicle’s insurance will be cancelled and she won’t be able to drive any more.

          • leftoversright

            She was totally at fault. She entered an intersection without making sure it was clear.

          • ClaimsAdjuster

            Since the Lyft driver’s policy will not pay one red cent due to the business activity exclusion on the vehicle’s non-commercial policy , Lyft will end up paying for the accident.

          • dukeduk

            I think Lyft ponying up and paying for the accident is given.

            The elderly pedestrian and her ambulance chasing lawyer will likely sue both Lyft with deep pocket (VC’s money?) and the poor driver whose insurance got cancelled (not to mention not pay for the claim). The driver also has to explain why she was dumped by her insurance company let alone no renewal and point or 2 on her CDL.

            Sorry loose loose proposition for the Lyft driver.

          • brothenberg

            He was offline.. a citizen..nothing to do with uber.. same as a guy sitting at his desk waiting for a phone call / lead.. uber will not be held responsible..

          • Ed Healy

            That actually is not the current law. That is what Uber & Lyft wanted to be the law. I was a party to the hearing that unfortunately legalized the TNC’s without regulating them much.

            The version of the law that you are giving was the one before the final version. As the law reads now TNC must maintain Million Dollar insurance “while they are providing TNC service.” And anyone looking for a ride or positioning themselves for a ride fits that definition.

          • Laurel Denver

            What nobody ever mentions about these pedestrian accidents is that each driver had a green light, and was obeying all traffic regulations. Pedestrians ALWAYS have the right of way. But that doesn’t mean that they are crossing safely or that the driver is morally at fault. Pedestrians just walk into the street all the time in SF. Any driver who strikes a pedestrian is at fault legally, and can get cited. But if you live in here, you know people walk all over the place unsafely–there are no jaywalking tickets ever written in SF.

            In NYC, pedestrians know damned well never to cross in the middle of the block, (of course some do, but it’s rare) and the walk/don’t walk signs are timed to give pedestrians their own turn, and cars their own turn. In SF, the lights give the traffic AND the pedestrian the green light. It needs to change.

            The tragedy of that young seven year old is haunting, but if the lights worked safer, it might not have happened.

          • leftoversright

            The accident last week Friday was at an intersection with no light, just 4-way stop. The pedestrian had the right of way!

          • Laurel Denver

            Pedestrians always always always have the right of way, as I said before. Even when they are jaywalking or jumping out into traffic.

            The way I heard it (Lyft driver at Larkin), the driver came to a stop, then went ahead and just plain old didn’t see the elderly lady. The driver also stopped immediately, got out to give aid to the woman, called 911, yelled for help, and was beside herself in tears, terribly upset at what had happened. She fully cooperated with police.

            I guess my point was, to vilify these drivers is not fair.

            I mean, have you watched all the taxicab videos on line of the cars speeding, running red lights, or the taxi driver being drunk or not the same person on the photo id in the car? And I’m sure there are lots of taxi drivers who are careful, and would end up in tears if they accidentally hit a pedestrian.

            These are people, and frankly, just people trying to make a living.

          • leftoversright

            I have driven for a TNC, my point is that in the middle of the day a woman crossing the street should not have to worry about a TNC driver making a left to get a passenger to their destination.
            A driver approaching an intersection must yield the right-of-way to traffic already lawfully using the intersection. The lady hit was in the crosswalk!
            Not saying the driver wasn’t Sorry, but she should have seen the woman and she shouldn’t have been driving more than a cautious 2-3 miles an hour which would have given her enough time to stop, if she had been paying attention.These accidents are what’s making the TNC’s seem reckless and out of control.

          • Laurel Denver

            Shoulda coulda woulda. We are all sure that you are perfect and never ever make a mistake. Glad you are here to tell us that.

            I guess we should all be like you, and never carry insurance, because nothing bad could ever possibly happen.

          • leftoversright

            What’s with the attitude? My point was that in the middle of the afternoon one should expect a pedestrian crossing the street when making a left turn. If you can’t see the full intersection then you must continue VERY slowly. I support the TNCs; which is why this is important to me. The more careless driving the more ammunition the Taxis will have in shutting it down. She was not fully aware of her surroundings and that is of the utmost importance. Deactivated, not fired. You can’t be fired if you aren’t an employee. She merely had access to the application. You have no idea how sorry I am for both these women.

          • Barry Korengold

            “.. never had an accident or issue to lie about..” Give it some time, you’re still a rookie.

          • ClaimsAdjuster

            You can get a commercial insurance plan for $4K per year for a TNC in Seattle. Compare that to $6500 to 13500 annually for a taxi. But the TNC drivers won’t pay $4k instead of $1.5K for invalid non-conmmercial insurance unless the government makes them do it.

          • Laurel Denver

            It’s a catch-22, because even if you want to buy the commercial insurance, they won’t insure you unless you have a commercial license and the car has commercial plates, which is impossible if you have a privately owned regular car which you use for personal reasons.

          • Ed Healy

            Hybrid insurance doesn’t work because it’s impossible to know for sure if a Lyft driver is working or not. The only insurance that can be safe for the public and profitable for the insurance companies is commercial insurance.

          • brothenberg

            What do you mean? The hours on Lyft are shifted or taken using a platform, UberX logs drivers logged in.. Hybrid Insurance is very possible to maintain, everything is GPS tracked and logged and recorded.. there would need to be a system in place to share the info, not impossible. I could rock the insurance plan.. I’ve been trying to create it with.. few thousand drivers per city x all the cities.. you’d have those contracts for a while.. make some good money!

          • brothenberg

            Also.. if I am logged into multiple TNC’s at the SAME TIME.. who should cover me?

          • Laurel Denver

            Not true. If you are logged on, you are working. If you are logged off, you are not working. The computers track every second of every ride, so it’s easy to figure out.

        • KathrynD

          Completely agree, if he’s doing 10 rides a day and lets just say the average ride time is 30 minutes that means he has a passenger in his car for about five hours a day. Let’s factor in drive time to go pick up a passenger and the time he waits between trips he’s probably on the road for at least 8 hours a day if not more. He’s also probably putting about 200 miles more per day than a normal car would for personal reasons based on what he claims.
          I do not blame insurance companies at all for not giving a driver like this personal insurance when the driver is on the road driver longer and farther than 99.9999999% of other individuals on personal insurance policies. When you driver longer and farther you’re a higher risk for getting into an accident. That is why there are different insurance policies for different types of drivers/vehicles.
          Uber and Lyft are getting into a situation here where they only way to stay in business is to either raise their rates so drivers can afford the higher insurance policies which will lessen the amount of people who use their services or lose drivers who do not want to deal with the hassle. Either way, if a vice grip gets put on them from an insurance standpoint, they are going to have a hard time keeping their business model as it currently is.

        • Laurel Denver

          10 rides a day is super easy work. My housemate drives for both Uber and Lyft, and she says she averages 20-25, and seldom works more than 6-8 hours. Just FYI.

      • Laurel Denver

        Yeah, I bet that Uber driver was accident free too. Until he wasn’t. We all are accident free. Until we are not. That is why we need insurance.

  • brothenberg

    Hmm Lyft.. if you tweet.. Lyft responds in a millisecond.. if you try and ask them about insurance you never ever hear back… thats why everyone should have to read the TOS after downloading an app..

  • Matt Strader

    I really don’t understand why some people are so against
    Lyft and Uber services when they are cheaper alternatives to taxis. Using Lyft
    myself, I truly see value in the whole ridesharing program. And if you use the
    promo code THEROW2 on your Lyft app you can even get a free $20 in Lyft driving
    credits wherever you want to go and hopefully see what I mean and get a little
    perspective 🙂

  • Nelson Hermance

    The following statement perfectly illustrates the fact that we do not have “Free Market Capitalism” in America anymore – or anything remotely close to it:

    Musing about his quest to leave the taxi business, Clark says, “I could get a brand-new Prius, drive any time I wanted to, and just make money. That’s like a dream; too good to be true. In fact, it was too good to be true. You can’t get insurance on them.”

    What is now a distant dream – “to good to be true” was in fact REALITY in the America of our forefathers. How far we have fallen! Until the 1950’s the Taxi business was wide open. Anyone could just put a sign on their car and drive. Mandatory insurance? fogetabouyt it. Taxi medallions? either non existent or very cheap and only available to those who actually drove a cab. You could not hoard medallions as many companies do now purely to rent them out to some poor sop, nor could they be sold to hedge funds for millions like they are in NYC.

    It’s interesting that at long last the (economic, social and political) evils of mandatory insurance are starting to become appearant. While that is only a small aspect of the loss of economic freedom we have suffered in America, it’s worth talking about here. I have warned about this for years. Warned that mandatory auto insurance would be used as a precedent to make insurance mandatory in other places as well.

    Well guess what America: you now have mandatory HEALTH INSURANCE. If you don’t buy mandatory health insurance you have your tax money seized. Unless people fight back there will be plenty of additional places where insurance becomes mandatory. But it’s even worse than that. There are plenty of other places where your lives will be controlled via command from some government agency or another in all sorts of ways.

    But lets return to mandatory auto insurance for a minute. Most people agreed with that given they did not question a fundamental tenet of mandatory auto insurance – a fundamental tenet that was and is exactly 100.00% FALSE. That tenet is the notion that “without mandatory insurance the public is unprotected.” The thinking was: what if you are hit by an uninsured driver – you are screwed and hence we need to make auto insurance mandatory under the law.

    There are two massive logical holes in this argument: 1) insurance coverage is available now to cover you in the event that you are hit by an uninsured motorist. Not only is it available virtually EVERYONE has it included. I challenge everyone reading this to look at your insurance policy. You will find something titled UI or something similar to that and if you look at the line item it clearly indicates what it is: if the other driver does not have insurance this covers you. It’s typically $3 or $4 dollars a month and virtually all policies have it. But check for yourself. Look. If you don’t believe me ask your insurance agent. This leads to the second huge logical hole in the mandatory insurance fraud. Mandatory insurance (of course!) does guarantee that everyone actually gets it: otherwise there would be no reason for the UI rider (DUH!). Plenty of people still drive around with no insurance even though it is the law.

    So mandatory auto insurance fails to solve a problem that did not even exist in the first place: namely protection from damage done by uninsured motorists. The solution to that problem is the UI rider.

    But if insurance was not mandatory no one would buy it, right? WRONG! Before it was mandatory over 75% of motorists had it. Remember that most Americans were and are middle class (for the moment anyway) and it was seen as the responsible thing to do so as to avoid losing your house and life savings. Only people on the margins did not get auto insurance.

    So what does mandatory auto insurance really do? Provide a new gravy train to insurance companies and lawyers. Why? insurance is (obviously) more expensive now that it’s mandatory and there are more opportunities for lucrative lawsuits.

    What it achieves is more money for insurance company CEO’s and personal injury lawyers. That is ALL IT DOES. Check your insurance policy for “UI” coverage to verify that what I am saying is correct.

    The whole business of mandatory auto insurance shows clearly the power of propaganda and fear and how those things can be used to compromise peoples ability to think logically and then leave them open for a fleecing.

    Which leads to a final (and sad) irony: while insurance is mandatory in a place where there is no reason for it to be mandatory, it’s not even available in a place where it SHOULD be: ride sharing. Just shows how dysfunctional our society has become.

    We have massive problems with pollution, traffic, global warming, lack of community, a very wasteful transportation system and ride sharing could be a small (but significant) aspect of a solution. The problems with insurance show how dysfunctional this country has become.

    We do not have anything close to “Free Market Capitalism” in this country. That’s a joke. We have crony/clepto/casino capitalism and my guess is it’s gonna be a very rough ride from here: and not a shared one!

    • pitbullstew

      if ya wanna take to the streets and do livery work you simply have to get used to the idea that there are rules and regulations that you are going to have to deal with, if you choose not to operate within those parameters then you are an outlaw

      • Nelson Hermance

        That’s not the point. Of course we have to follow the rules or we are outlaws – by definition. My issue is what should the rules BE.

        For instance taxi medallions. They provide an absolute limit on the number of taxi’s that can operate in a given jurisdiction. If you think that’s OK then please explain why we should not also limit the number of restaurants in a given city. How about the number of barbershops.How about saying that there can only be 423,948 websites on the world wide web – and if you don’t have a “website medallion” you cannot put one up there. Without the taxi medallion nonsense Lyft/Uber etc. would have clear sailing. They would just officially declare themselves taxi services and go on with it. But they can’t because the number of taxi’s is strictly limited in every major city in America.

        • TerryGauchat

          In San Francisco, we DO limit the number of various types of businesses on a neighborhood by neighborhood basis. Noe Valley, for example, cannot have another Bank branch or Real Estate Office.

          Is this a good thing? Well… the policy has an appeals process and citizens of the neighborhood have a good opportunity for public comment. This seems pretty darn democratic to me.

          Ensuring a diversity of services in a neighborhood is a good thing.

          How does this apply to taxi/limo supply? Oversupply will tend to weed out drivers who cannot afford to live on peak day/hour wages only; or only on long-trips to the airport. There are other possible solutions to this … surge pricing is an obvious example as used by Uber… and it is quite a controversy.

          A legitimate issue: If someone mobility limited (elderly, etc.) urgently needs a cab during a surge period, they don’t have an alternative affordable choice. This is similar to the lack of a true “market” in health care. People brought into an emergency room do not have the option to price-shop until stabilized, and there is a monopoly for patent protected medicines and specialized procedures.

          • Jim

            Prior to the Harrison Act of 1914 (giving doctors monopoly prescription authority) any American could buy any drug “over-the-counter.” Opiate addiction was common, but it was not considered a big deal. Religion kept most people on the “straight and narrow” and our economy flourished anyway. Our Founding Fathers “self-medicated” without fear of imprisonment. Not surprisingly, health care costs were a fraction of the national GNP.

        • Barry Korengold

          One major reason the number of taxis in a given jurisdiction are limited is because on demand (taxi) transportation requires vehicles to cruise or stage in populated areas, causing extra congestion, pollution and wear and tear to the roads. San Francisco has the cleanest taxi fleet in the nation, with 97% hybrid or alternate fuel vehicles. What good does this do if there’s even MORE vehicles simultaneously providing the same service, but without the same restrictions?

          There have been several studies of cities that have tried deregulation. Every major city has gone back to regulation within a few years. When there is a limited number of passengers and an unlimited number of vehicles, many problems arise such as aggressive driving, turf warfare, lower quality of vehicles, lower quality of drivers, etc. It’s a race to the bottom for drivers and the public.

          • TerryGauchat

            Very good observation.

            See my comments above regarding the risk of overly complex and corrupted regulation, however.

            In fact, Lyft/Uber are a perfect example: These companies are taking advantage of the “loopholes” in the taxi regulations that define “limo services” as different than “taxicabs”. The “real-world” has created a hybrid that was not predicted by our forefathers (sound familiar?). What’s the right answer? Review the entire set of relevant regulations, throw them out, and write them again given the new developments… but, of course, there is no way that will happen in a fair and honest way because the laws are always written or maintained to benefit whoever is best funded and/or politically influential.

            In the current situation, the taxi industry is fighting against the venture capitalists which own Lyft/Uber. The battlefield is City Hall. I’m not sure who will win — only that the outcome will not be determined by optimal public-good; but rather, by whatever special interest has the most influence. That’s corruption of the government that is supposed to be “by the people and for the people”.

      • Nelson Hermance

        I’m curious about whether you feel the same way about ObamaCare. You either get it or are an outlaw? Case closed….no questioning whether it’s the right thing or not? If you feel differently about ObamaCare then please explain.

    • TerryGauchat

      Ummmm…. Uninsured Motorist coverage only covers other INSURED motorists.

      Ride-“share” Drivers who are earning a profit, are, by a large majority, making trips that they would not be making without a paying passenger.

      If an uninsured driver hits a PEDESTRIAN, and puts them in a wheelchair or ventilator for the rest of their lives, there is no insurance coverage, because the driver at the time of buying their own insurance policy, agreed that they would not be using their vehicle for commercial purposes. It is a simple legal contract.

      The driver is liable for $ millions in damages to that pedestrian. You don’t have to have insurance if you obtain a sufficient “surety bond” against your assets. We all know what bondsman did before the 1950’s.

      • Nelson Hermance

        You are absolutely correct: Ride-share drivers should have coverage – see my post above about the irony of the whole situation.

        I believe that Lyft has 1 million dollar liability for drivers providing rides. The part about personal coverage being denied if insurance companies “find out” that you are engaging in ride-sharing just re-enforces my point that we do not have free market capitalism in America. If we did coverage for ride-sharing would exist in 5 minutes. It might be (very?) expensive at first but in a free market it WOULD exist. Guaranteed 100.00%. Gets to the DEFINITION of free market capitalism.

        The reason that it does NOT exist (so far) as almost certainly that statutes exist that forbid part time livery services; force a car to be either a livery vehicle OR a private car, not used for both purposes.

        So insurance companies are probably barred by law from providing coverage for rider sharers. I repeat again: we do NOT have free market capitalism in America. We have a manipulated system of crony capitalism dominated by lobbies for entrenched interests.

        • TerryGauchat

          To this particular reply: I agree.

        • ClaimsAdjuster

          ‘The reason that it does NOT exist (so far) as almost certainly that statutes exist that forbid part time livery services; force a car to be either a livery vehicle OR a private car, not used for both purposes.”

          There is no such law. Insurers do not want the risk of a cab business without getting an appropriate premium. They have no way of knowing whether the vehicle is used 16 or 168 hours a week. The TNC driver doesn’t want to pay for commercial insurance so they fraudulently hide their business activity.

        • Jim

          Insurance is nothing more than a state-sponsored license to gamble.

        • Barry Korengold

          Please look up the definition of “ride-sharing” according to California Public Utilities Code 5353(h). Lyft, Uberx or Sidecar have nothing to do with ride-sharing. They are providing taxi service on the cheap by avoiding regulations.

      • Nelson Hermance

        What if an uninsured driver hits a pedestrian? The answer is that every one of us has the ability to purchase disability insurance on our own accord. Such a policy protects you in the event of paralysis (or whatever) at the hands of ANYTHING. Uninsured motorist, meteor whatever. So in fact you can be protected.

        What is missing in this scenario is that you are unlikely to get rich if all you have is personal disability and you get disabled. If you were paralyzed by an insured motorist – or a construction crane or something, you are likely to get a 7 figure settlement.

        This system is not about protecting people from things so much as preserving a system where they can make a very large payday as the result of a personal tragedy.

        I find this aspect of our system deeply corrupt.

        We ALL suffer tragedies and problems. We will ALL die someday. Why allow SOME to get rich from it.

        A close family member of mine died a a somewhat young age from cancer about 10 years ago. It’s altogether possible that the cancer was the result of an exposure to something.

        Had the the cancer been mesothelioma than someone would have made a big windfall. But it just so happens that it was not mesothelioma and it could not be determined what caused it (we didn’t even try to ascertain that). Personally I would not have wanted to profit. I would find that disgusting. But much of the public seems to disagree with me on this point and is all to happy to attempt to make a big windfall on their own or someone else’s tragedy.

        In closing, PROTECTION is fine. Windfall profits from suffering (in my opinion) are not.

        If you have personal disability coverage you can maintain your income if you become disabled. THAT is protection against being hit by an uninsured motorist – and protection against just about every other accident/trouble that you can think of. If you are really interested in PROTECTION that’s all you need.

        • TerryGauchat

          Why should an innocent pedestrian be responsible for the injuries caused by a negligent driver working for profit? The driver is seeking to earn income from driving; that driver must take all the risks associated with that activity, or transfer the risk via insurance or an employment relationship to someone else. Personal disability insurance (true “no fault policies”) is a great idea, but it is far too out of context for this discussion. You are proposing elimination of injury tort law which has existed for hundreds of years.

          In the case of Lyft, I think that Lyft should provide ALL coverage, except in the case of a criminally negligent action. Lyft drivers should be considered employees.

          But the only way this will happen is if Lyft Drivers realize that they cannot profit after consideration of all their hidden expenses and risks, including, but not limited to, appropriate insurance policies.

          Will an insurance company underwrite Lyft drivers with comprehensive policies? I don’t see why not. It could be a lucrative market; or not … since the mandatory requirement for this insurance will put most Lyft Drivers out of work.

          • Nelson Hermance

            I think you misread what I said above: I do not believe that a person who is hit by a Lyft driver should be “held responsible” for the injuries caused by someone else’s negligence.

            Of course the Lyft driver/Lyft should be and they are – they have a one million dollar liability policy.

            My issue is that insurance companies do not provide comprehensive coverage for shared vehicles. They probably cannot for legal reasons. So it would appear that if a Lyft driver crashes he is out his car (remember that liability IS covered) and that makes it more difficult for Lyft.

            I see no reason to presume that such insurance policies would put most Lyft drivers out of work. Cabbies have it and they are not out of work. The cost structure for cabs is higher than Lyft given a) the medallion nonsense and b) the cab they drive cannot be used as a personal car also. Their cost structure is a LOT higher actually and I have heard rumors that here in Chicago cabbies are dumping their cabs and moving to Uber in a big way – because they can make much more money.

            The cost structure and technological advancement of the Lyft/Uber model make it a clear winner in my opinion – unless the taxi lobby destroys it legally.

            Finally, if you really are a libertarian I would be interested in your take on taxi medallions.

          • TerryGauchat

            I’m all for taxi “licenses/permits” which ensure that the vehicles and drivers pass background checks, safe driving, non-discriminatory pickups, etc..

            The medallion system, of course, is bunk. It creates an artificial limitation on supply in order to inflate prices. The intent was to ensure a livable amount of rides per available taxicab.

            Manipulation of supply in order to stabilize the market is not necessarily all bad. Consider that farmers might have to leave their vocation if there is an oversupply of the crops they can produce for a few years; then, when a drought occurs, we have no farmers to rework the land.

            Similarly, there can be too many idle taxicabs during non-peak days/hours if there was no limit imposed.

            But, of course, this is a very clear example of a regulation that could have been applied in a “reasonable” manner, that was abused, manipulated, and corrupted.The medallions have become a traded commodity which is nonsense and the regulations should be thrown out and replaced with minimal/optimal ones.

          • Jim

            This country really needs another revolution. There is just so much regulation that any one man can stand. Did you know that it is illegal to pitch a tent in Golden Gate Park? What is a man to do, sleep on the sidewalk? All these so-called “zoning laws” are nothing more than a protection racket. They have done nothing but provide a monopoly to pre-existing homeowners. THEY GOT THEIRS AND PULLED THE LADDER UP AFTER THEM, LEAVING THE REST OF US STUCK ON THE BOTTOM. Height limitations, building codes, tree protection, easements, parking requirements, etc. etc. No wonder housing is unaffordable in this City. Everything is regulated. Why can’t I sell beer at Candlestick Park from the trunk of my car? I really need the money and there’s a demand for cheap beer. Candlestick Park vendors charge an arm and a leg for a tallboy. But try setting up a little business and you’re BUSTED. Talk about tyranny. We need a complete reordering of the STATUS QUO.

          • Nelson Hermance

            I totally agree Jim. Most of the regulations that you talk about have one and ONLY one purpose: to protect the insiders, the already rich the already well connected from legitimate competition.

            They use the guise of “safety” and “security” but the real reason is GREED.

          • ClaimsAdjuster

            I know an ex-cab driver who is working for UberX. He bought a new vehicle which he insured with a commercial policy for $4K a year. But he works 60 a week. He has to since UberX’s rates are only $1.63 a mile. It is doesn’t pencil out to make a $30K investment for an automobile, pay gas, and shell out all this money for liability and industrial insurance for so little return.

            So the natural inclination of most of these drivers is to cut corners. A colleague of this driver recently got into an accident while occupied with an passenger who told the other party that the vehicle was UberX. There is no way to tell visually that this was an UberX vehicle because there are no moustaches, markings, distinctive paint job or decals.

            If the customer hadn’t blabbed, this accident would have been covered on the driver’s non-commercial policy.But since it did come out, the driver’s policy was cancelled and it will be very difficult for him to get new coverage.

          • TerryGauchat

            Your friend is lucky that the customer “blabbed”

          • ClaimsAdjuster

            At least half these these fraudulent claims get paid because the insurance company has no idea that this vehicle was being used as a taxi. In addition to mandating that these vehicles carry commercial insurance, it is necessary that the TNC automobiles be identifiable through a sign or paint job. A moustache that can be thrown in the trunk before the police arrive is not going to cut.

            The CPUC was way over its haed when they issued the TNC regulations. They should have left it in the hands of the local taxi regulators.

        • Jim

          “Ignorance of the law” should always be a defense. This would make laws more easy to understand. Requiring average citizens to understand the legalize in Lyft’s “Terms and Conditions” is unfair, deceptive and benefits lawyers and companies. Owners of companies and corporations hide behind the government’s protection of “limited liability”. This is another example of state power being used to protect the rich and screw the poor. Get rid of limited liability and a company like BP would not have assumed the risks that led to the Big Spill.

          • Nelson Hermance

            Ignorance of the law” should always be a defense

            Interesting idea. I think that’s an extreme but “ignorance of the law is no defense” seems better suited to a simpler time and I agree that the concept is now used to screw the little guy.

            Just look at bank fees!

            Maybe something in the middle would be appropriate. With common law stuff (like murder) “ignorance of the law” should obviously not be a defense, but with a lot of complex issues – maybe that’s the way to go.

            If banks could not hit customers with punitive fees unless they could prove that the customer really understood what he was getting into, that would REALLY put the damper on a lot of exploitative stuff. Banks of course have every right to recover their costs (for things like bounced checks) but those costs are in reality usually minuscule.

    • cigarbat

      Uninsured Motorists only pays for an accident when the other party has no insurance.
      If UM were to respond to every accident, it would be just as expensive as regular auto insurance.

    • ClaimsAdjuster

      “What is now a distant dream – “to good to be true” was in fact REALITY in the America of our forefathers. How far we have fallen! Until the 1950’s the Taxi business was wide open. Anyone could just put a sign on their car and drive. Mandatory insurance? fogetabouyt it.”

      Oh for halycon days when a cosmetics manufacturer could give the liitle lady a real glow by putting radium in their products, a man could leave his dead horse in the street and people dumped the contents of their chamber pots out the window. Now a gypsy cab driver cannot even run over a liitle girl without busybodies whining about liability.

    • Driver

      Taxi deregulation has been tried in at least 18 cities and it is always a disaster. I own many taxis and It costs about $5,000 a month to put a taxi on the road. There are some good reasons the liability insurance alone is $10,000 per taxi per year. SF is more congested than almost anywhere in the US and a lot of accidents happen. It is inevitable.
      BTW Herman who is going to pay for the drivers injuries if he is at fault? The tax payers of course

      • Nelson Hermance

        I develop websites and have to compete with people all over the world and do not have the benefit of people being barred from competing with me by law because the have no “world wide web medallion”. Actually I would not consider that a benefit. It would hurt everybody -myself included.

        As far as “to much congestion” goes, that argument is a canard. Shared transport (like taxi’s) REDUCE congestion and we need MORE OF THEM -to both reduce congestion and save the planet.

        The absolute worst thing for congestion (and the environment) is private cars with one rider going suburb to suburb. Want to destroy the planet guaranteed with massive global warming? Just continue doing that.

        We need MORE taxi’s (and lower fares), more things like Lyft, and more mass transit. Medallions should be abolished. Done away with.

        And the liability insurance should be available to ANYONE who can pass the tests and prove he is worthy of being a cab driver. Not just the plantation owners….er I mean medallion holders.

        • Jim

          The World Wide Web is about as free as the NSA allows. A lot of people can’t compete with you because they can’t afford the licensing fees Adobe, or Microsoft, or Apple charges. You’ve got yourself a sweet gig. Our government forbids the sale of a lot of software to overseas customers. All these internet johnny-come-latelies moving to San Francisco kicking the old timers out is an outrage. The tax exemptions SF is giving to the likes of Twitter, et al. is another outrage. Let’s heap more money on the rich.

        • Jim

          Besides, you’re the beneficiary of a lot intellectual property laws, copyright laws, trade agreements prohibiting piracy with a lot of hidden language stripping Americans of some basic freedoms; i.e., the impending Trans-Pacific Partnership (TPP).

          • Nelson Hermance

            Not sure whether your post was meant as a joke or not. IP, copyright etc. does nothing to protect me, in this context it protects the big companies FROM me.

            I make websites for companies (and some individuals). THEY own whatever IP or copyright there is, not me.

            IP laws protect Coke/Kentucky Fried Chicken/NFL logos, stuff like that.

            Likewise copyright law – same thing. I don’t disagree with those laws (up to a point) but lets not forget that they protect the powerful and influential, not us little folk.

  • maplecraig

    This Lyft driver is about to be sued in civil court for attacking and punching a pedestrian several times for taking a picture of his Lyft car parked in a crosswalk, disabled ramp and fire hydrant. A police report for assault has just been filed and is being investigated by the SFPD. Wonder if Lyft’s insurance policy will help him?

  • pitbullstew


  • brothenberg

    Who wants to have fun and call up this company? Only company I’ve seen promote for UberX insurance yet.. but we all know it doesn’t exist ..

  • Cigarbat

    As an insurance broker I can tell you emphatically every Personal Auto Insurance Policy in the United States excludes “Livery” use of the vehicle.
    You can lie all you want, if you get into an accident, the Insurance company will refuse to defend you nor will they pay the claim.
    Your Personal auto Policy also does not cover long haul trucking. If you insure the Space Shuttle on you personal policy, they won’t pay for any of those accidents either.
    Either way, you have no insurance coverage. If you lie, they can even refuse to pay a personal auto accident even if it has nothing to do with you driving for Uber/Lyft etc.

    • Nelson Hermance

      Maybe you can verify for me that by statute a car must be either livery or personal – not both.

      Otherwise why is coverage not available for ride sharers.

      As to mileage, I’ll tell you what FREE MARKET CAPITALISM would do: your rate would be adjusted for the miles you drove. If you drive 100,000 miles in a year you would pay much more than if you drive 5,000 miles. If you engage in ride sharing you pay more to begin with.

      There is a big difference between paying an appropriate price for what you are doing vs. not being allowed to do it at all. It’s the difference between freedom and tyranny.

      • TerryGauchat

        A paying passenger creates an implicit contract for safe passage. THAT is why livery insurance is higher; a paid driver is held to a higher standard of care.

        As for why a driver and/or vehicle cannot have blended use, I think this is just a risk management issue. Insurance companies, indeed, have too much lobbying power and net profit. Creating hybrid policies runs into all the OTHER regulations that limit the prices and behaviors permitted by each State.

        Insurance is a complex product; this is why the theory of a free-market does not apply without considerable real-world complications. “Risk” is entirely a theoretical concept: I can flip a coin a thousand times, and, in theory, NEVER see land on “tails”; does that mean my risk of tails is zero and my premium should be zero? Of course not.

        Believe me; I have strong libertarian tendencies. I believe in optimal regulation, not minimal or elimination of regulation. I also agree that (a) we are extremely over regulated and that impacts productivity and innovation, and (b) well-funded lobbyists are able to corrupt the regulatory system, thus preventing a level playing field.

        What is the solution to (b)? Fewer regulations or more? Or anarchy?

        • Nelson Hermance

          The answer is to only have regulations that serve a clear societal purpose.

          In the case of shared vehicles and taxi’s the regulations should focus on mostly on safety.

          The regulations that should be eliminated are those whose purpose is to arbitrarily advantage one group economically over another. And the US is CHOCK FULL of these right now.

          For instance taxi medallion regulations are solely for the purpose of preventing competition and advantaging insiders.

          For instance Boeing pays no property taxes at it’s headquarters in Chicago for 20 years. Because they promised to “create jobs”. Regardless of the rationale the city of Chicago has chosen a winner in the economic sphere: Boeing, and I think that’s just wrong. Why shouldn’t ANY BUSINESS get a tax break if they create jobs. Why just Boeing.

          I suspect that the Livery industry lobbied to prevent shared vehicle insurance so as to prevent economic competition.

          These kinds of regulations should be eliminated if we want to call our system “free market capitalism”

          • TerryGauchat

            Different tax laws are used all the time to implement social policy (i.e., “societal purpose”); and, as you noted, this is far too often abused.

            Tax breaks for job creation could be implemented in a much more direct manner so as to be applicable to every company entering the region; i.e., a tax credit per worker per salary level.

            Tax breaks for clean energy innovation are more difficult; should wind and solar receive the same tax break? Not an unsolvable problem; the government is capable of comparing the environmental / social benefit of each variation.

            And, yes, perhaps Lyft and other companies in the “sharing-economy” deserve to have a BREAK from legacy regulations in order to promote the benefits of their innovations, improvement of supply, reduction in DUI’s, flexible income, etc..

            So … I think we agree that the problem is not regulation as a generalization, but the perversion and corruption of regulation by entrenched and/or wealthy/powerful entities.

            Political polls of entrepreneurs lean Republican in hopes of fewer regulations, though the same polls show substantial alignment with Democratic social contracts. Clearly we need a revolution in the USA in order to reconcile these into an intelligent compromise.

          • Barry Korengold

            As I explained in an earlier post, passenger transportation for hire, particularly “on demand” (taxi) transportation, is highly regulated for public safety, road congestion, pollution and many other concerns beyond the simple “to prevent competition” explanation you give. There’s plenty of competition in the taxi industry, at least here in SF. The UNFAIR competition comes from having two different sets of rules for two groups providing the same services to the same customers. Particularly when the group with the lesser rules can’t even follow those!

          • leftoversright

            S.F needs the TNCs because without them there is no Taxi coverage in the western part of the city. For the first time in my 35 years in the Sunset there are Taxis out here. Not picking up but at least dropping off.. If the competition continues we may even see some pick-ups. Who knows, miracles do happen.

  • Cigarbat

    The reason is simple. A personal auto policy operates about 15,000 miles per year. A Taxi/limo/sedan business puts on up to 100,000 miles per year.
    A person driving around on a 12 hour shift, day after day, has a tremendous amount of accidents every year. A personal auto has very few accidents in it’s Lifetime.

  • Dave Sutton

    This is a serious piece of investigative journalism. I would encourage Mr.
    Brooks to further consider: What is going to happen to those people who take on the low-interest new-car loans from UberX, knowing their insurance won’t cover them if they are discovered to be using the vehicle commercially and that Uber has declared it will
    spike the lending rate if the driver stops driving for UberX? Won’t these people
    then be trapped between a rock and a hard place? Aren’t they future victims
    of predatory lending at its most vicious?

    By the way, here’s a Wikipedia description of “soft” insurance fraud: “Soft fraud can also occur when, while obtaining a new insurance policy, an individual MISREPORTS previous or EXISTING CONDITIONS in order to obtain a lower premium on their insurance policy.”

  • carl macmurdo

    Thank you. I have forwarded this article to the SFMTA Board of Directors, the Board of Supervisors, and the Police Commission with a request that each body respond to its need to protect public safety by taking action against insurance fraud perpetrators.

    • Nelson Hermance

      You missed your calling Carl. You should have been in the Soviet Union in the mid 1930’s. LOTS of opportunities there to turn hard working people over to the state so they could be ruined. Probably would have felt really good to you.

      As I have said above, many of these people are not allowed to purchase insurance in the first place and are desperately trying to care for themselves and their families in a tough environment with 7% unemployment and have few other options.

      Shouldn’t we be trying to create jobs in this environment not destroy jobs (and lives?).

      • TerryGauchat

        Lyft creates liabilities, not jobs. If they were a job creator, they would be an employer and pay for insurance, benefits, training, and employee taxes (SSI, SDI, and UI).

        • brothenberg

          They allowed a 4 Door Toyota Tundra on the lyft platform.. who is this helping?

          • TerryGauchat

            Good point: Regulation to enforce environmentally friendly vehicles seems attractive; however, since the Drivers are responsible for their own fuel costs, that should be sufficient disincentive to use thirsty vehicles.

      • ClaimsAdjuster

        The TNCs are not creating new jobs. Thay are just moving business from legal for hire vehicles that have insurance to gypsy cabs.

        • Nelson Hermance

          This whole thing has gone down the way it has purely because of the medallion system – which puts absolute upper limit on the number of cabs in every major city in America. That system is a hold-over from the great depression/WW II era and was supposed to be TEMPORARY. But once some got the privilege of a medallion they did not want to give it up. Here we are in 2014 and the medallion system is STILL in place.

          There is no way to directly compete with “legal for hire vehicles” due to the corrupt medallion system.

          That to me is THE problem.

          Furthermore given their monopoly, the cab industry has no reason to innovate nor give good service.

          Lyft and Uber (and some others I believe) have systems where real time maps match the closest driver with someone requesting a ride and show the customer the drivers location at all times as he drives to pick them up. Most of these companies use GPS at all times. That to me is INNOVATION, which in my humble opinion is a driving force making America great.

          The insurance problems are a SYMPTOM of the built in corruption in American business these days.

          Howling about Lyft and Uber drivers about not having insurance reminds me of racists in the old says howling against blacks who they claimed “had no credentials” when (of course) those poor black folks were not given the right to get “credentials” in the first place.

          Lyft and Uber drivers are not allowed to get the insurance -that you howl against them for not having only because the system (for them moment) is gamed against them and does not allow them to get it.

          That may be changing.

          • TerryGauchat

            I can generally believe that most laws *start out* as good intentions. An unregulated taxi industry has many risks, including under-serving of poor or sparse inconvenient neighborhoods. Cab companies, however, can supply this easier than the government, so a deal was made: the government will limit the number of ppermitted cabs (thus ensuring there is no over-supply in peak areas) in exchange for cabs following various rules for fairness, not just safety.

            But how do you transfer a cab-permit (medallion) in a fair way?… Well… That’s the part that was left unregulated and became a nonsense market for a government created commodity.

          • Nelson Hermance

            Why should it be the job of government to ensure that there is no “over-supply” of some economic good. In my opinion that should be left to the private sector. THAT is what the private sector is good at -and government is historically terrible at. And when the government gets into that kind of micro management corruption is virtually inevitable.

            I think the governments role here should be to insure safety – and also I’m fine with forcing cabs to serve all areas and all neighborhoods in return for a license.

          • TerryGauchat

            The continued existence and enforcement of the supply limitation is the deal the government offers to the taxi industry as compensation for some of the rules that the industry is required to comply with. For example, an unregulated taxi industry may decide to never service inconvenient or dangerous neighborhoods unless they can hike rates for these zones to unaffordable levels. This is a significant social impact.

            The government also enforces fares to be the same across all taxis.

            So the taxi industry agrees to certain unprofitable or profit-limiting practices, and receives in exchange, a “reasonable” control on over-supply which helps their ability to keep revenue at sustainable levels.

            In my opinion, this is an entirely appropriately “good-intentioned” system. This type of regulation has worked well for some industries for a period of time (“Bell” telephone infrastructure), and, it absolutely has broken down and created huge inefficiencies and market perversion in the majority of cases in the longer term (e.g., the old tightly regulated national airline regulation). But in both of these examples (telephone and airlines), deregulation did not solve all the problems.

            Given the “good-intentioned” hypothesis, I think the primary problem with regulation legislation is the impossibly slow pace of revision. Laws should be thrown out when no longer applicable due to changes in market forces, and, even better, laws should be easily revisable when their real-world flaws appear after implementation.

            So my ambivalence remains: Regulations (heck, all “law” — all government activity?) are and can be a good thing; yet in our political system that is driven by money and special interests instead of objective social-good, what starts out as reasonable and simple, almost always becomes tremendously complex and grossly unfair and seldom repaired.

          • Nelson Hermance

            “The government also enforces fares to be the same across all taxis.”

            Why does that make any sense. Do you really think the government has any business setting prices in the private sector? Yes I know that it’s been done this way in the taxi industry for decades but it’s holdover from the great depression/WWII era and is by definition socialistic. And an anachronism.

            I actually think socialism has a place in society but it should be making sure no one starves, dies of the cold and has a reasonable safety net. Training if they get laid off, that kind of thing. Not in setting prices. That makes no sense.

            Should the city of Chicago determine how much restaurant meals cost?

          • ClaimsAdjuster

            Actually the unregulated dog-eat-dog capitalism that you espouse is the anachronism. Taxi are public utilities like the electrical system. The whole west coast saw what the unrestrained pirate market would do during the California power crisis of 2001-2002. Power companies and energy brokers like Enron creating brownouts to extort more money out of consumers. It stopped only when the Federal Energy Regulatory Commission put a cap on interstate rates

            Seattle deregulated taxis in the early eighties. Some of the cabs had different rate structures on the same meter. Position 1 might be $1.20 a mile, position 2 $5. If the driver picked up if you were from out of town, you might get the $5 rate. Tourists were complaining that an airport trip that cost $25 one way cost $50 on the way back. Many of the cars were junkers that were safety hazards.

            If UberX/Lyft and Sidecar put the regulated taxis out of business, incidents like Jessica Seinfeld being price gouged $415 to go a few blocks will be more common.


          • Nelson Hermance

            I’m all for regulation – it’s just gotta be the right kind. Power transmission is a “natural monopoly” I think and privatizing that is asking for trouble.

            But cabs are more like restaurants. A natural for the entrepreneur, low inherent barrier to entry etc. etc.

            I am totally in favor of regulation for safety – and I think there should be some regulation that forces prices to be transparent – in pretty much all industries.

            One of the big problems with capitalism is that it tends to not remain “free market” for long. People like medallion holders swoop in and cronyfy it. Businesses merge and then become monopolies or oligopolies.

            No one has ever made a plausible argument the explains why it’s ok to limit the number of cabs in a city but not the number of restaurants.

          • ClaimsAdjuster

            Restaurants are luxuries. Taxis are part of the public transportation system. You are comparing apples and oranges.

            The public expects that taxis not price gouge like Uber did with its $415 fare , hence the regulated rates. They also expect that cabs not cut corners with safety and insurance as UberX,Lyft and Sidecar are doing.

            To meet these expectations, municipalities all over the world put limits on the number of taxis so that the businesses can be viable.That is the bargain.

          • Nelson Hermance

            – If you don’t like Uber then don’t take Uber.
            – Are you going to say with a straight face that taxi’s are exempt from gouging?
            – I’m getting the feeling that you are part of the taxi industry so maybe you are speaking from a position of privilege not rationality.

            Restaurants should be exempt from this kind of “self serving for the insider regulation” because they are “luxuries”. HA now I’ve heard it all.

            It never fails to amaze me how people rationalize one set of rules for themselves (to their advantage of course) and then insist on a different set of rules on everyone else. Typically wide open competition for everyone else, a protected market for me.

          • ClaimsAdjuster

            Nelson, why don’t you just read my posts? As I wrote earlier “Seattle deregulated taxis in the early eighties. Some of the cabs had different rate structures on the same meter. Position 1 might be $1.20 a mile, position 2 $5. If the driver picked up if you were from out of town, you might get the $5 rate. Tourists were complaining that an airport trip that cost $25 one way cost $50 on the way back.”

            After the disaster of deregulation, the city and county set a one fixed rate which certainly did dampen the price gouging.

            But $415? That is special kind of price gouging.

            Restaurants are not only luxuries but also there is no limit on their rates.

          • Nelson Hermance

            In the early 80’s neither the World Wide Web nor the smartphone had been invented yet.

            Those are the two things (especially the smartphone) that are making this new way of ride sharing work. You can see rates, routes and a whole lot more on your phone. You can even see where the driver is in real time on a map. That stuff did not exist in the early 80’s.

            The early 80’s was a long time ago.

          • ClaimsAdjuster

            Irrelevant. The app just changes dispatch. It makes dispatch less expensive for the owners of the TNCs since the are not hiring anyone to answer the phone. (which makes your prior claim that the apps are “creating jobs” laughable).

            Underneath the cab service itself is the same down to the so called independent contractor system, which was lifted whole from the existing taxi industry. It doesn’t change the fact that the expensive part of the business is still with the car, the driver and the high liabilities..

            And the app does change the fact that flooding the street swith gypsy cabs reduces income for the legal taxi driver.

          • Nelson Hermance

            The Boston Globe article indicates that the medallion (in Boston) is the most expensive aspect of the whole thing: more expensive than insurance, more expensive than the driver’s salary and more expensive than the car itself.



          • ClaimsAdjuster

            Put a three year expiration date on the medallions and have a lottery or an auction to cab drivers for a third of the licenses every year. The price issue goes away and the city ends up with owner-drivers.

          • Nelson Hermance

            That would be a big improvement over what we have now.

            Absentee owners of medallions forcing cabbies to rent them in order to work almost seems like feudalism.

            Best case: no medallions at all and regulations focus on safety, and surety that all neighborhoods/ethnic/racial groups are served.

            Next best is a medallion system where the money goes to the relevant government agency (like the City of Chicago). The city after all has to pave the streets and provide police and fire protection and so forth.

            Worst is medallions owned by individuals who rent them out to someone ELSE. So private person X gets to force someone else to pay for the right to work. Seems sort of like feudalism.

          • ClaimsAdjuster

            Without a limit on the number of vehicles on the street, the drivers make no money. This leads to cutting corners as is the case with UberX,Lyft and Sidecar with insurance.

          • Nelson Hermance

            If you just limited the number of cabs and gave out medallions via lottery (for free) that *might* work to increase the amount of money drivers could make. I say “might” because it would be a balancing act. To few cabs and then no one can find one when they need, the public stops looking for cabs and the industry dies.

            I guess I think the government is skilled enough to set the number high enough so the industry survives.

            Unfortunately for cabbies that’s not how the system works. There is no lottery, there is a “medallion system” where the poor cabbie is forced to pay for the *right* to work. Currently medallion prices in Chicago average $347,564. Source:

            In NYC, medallion prices are over 1 million.

            So ClaimsAdjuster you have it wrong, the medallion system does not allow the cabbies to make more money, it s*c*r*e(ws them. Bigtime.

          • ClaimsAdjuster

            The loss of business that comes from flooding the streets with gypsy cabs like Lyft/Sidecar/UberX far exceeds whatever extra rental costs the medallion system imposes on the lease driver. Any cab driver will tell you that. You are just coming to the conclusion that you would like to believe due to your libertarian faith.

            The reality in the Seattle area where there is a limit of the number of taxi licenses is that many of these taxis just sit in their lots because they can’t get drivers. Your whole hypothesesis about the lease driver being gouged is based on demand to rent a cab that does not exist.

          • Nelson Hermance

            “The loss of business that comes from flooding the streets…”

            loss of business to WHO? Traditional old school taxi companies who control the medallions? Yes. They are losing business.

            But a loss of business in general? Of course not, it’s just business moving from traditional cab COMPANIES to companies like Uber/Lyft. I’m hearing that many cab drivers in Chicago are working for Uber and cutting back on driving the cabs.

            What on earth is wrong with that.

            I’m sure IBM would have loved to outlaw the PC (or make people pay hundreds of thousands of dollars for the right to have one) in the early 80. That would have protected their business – and we would all be so much safer because there would not be computer viruses and spyware, right?

            Thank god that did not happen and we had progress.

            Ride sharing using smartphones and the web is progress – and I don’t think this kind of progress can be stopped.

          • ClaimsAdjuster

            Actually the quote was “The loss of business that comes from flooding the streets with gypsy cabs like Lyft/Sidecar/UberX far exceeds whatever extra rental costs the medallion system imposes on the lease driver”, not your butchered excerpt.

            Yes, the taxis are losing income to the TNCs. That is what happens when there is an oversupply of for hire vehicles on the street. It is not as if the amount of business went up. Now it is just dispersed among more players.

            Your faux populism about the medallion owners is a red herring. First of all, the medallion system is in place in only a few cities in the US and is mainly just a way for the municipalities to raise revenue. Seattle has a limited number of taxi licenses and most of them are held by owner drivers. But there was no auction by the city that brought in outside license speculators like in Chicago.

            The issue is not medallions but whether a cap on the number of taxis is a good idea.

            Just deregulating puts marginal operators on the street who are cutting corners. That is what UberX,Lyft and Sidecar are doing with insurance.

          • Nelson Hermance

            It’s becoming more and more obvious with each post that you are in insider who either owns medallion(s) or benefits from the system that advantages one set of people (the insiders) over all others.

            There are plenty of ways to help cabbies and insure safety that would not involve the feudal medallion nonsense. But you keep coming back to that particular NARROW “solution” to various problems so you obviously have something personally go gain there.

            The medallion system is in place in EVERY major US city except Washington DC and there is HUGE lobbying by the taxi industry to force it down their throats there to. See the expose on that subject by John Stossel. Especially note the interview with the $750/hour taxi lobbyist who brazenly talks about “taking down the outsiders”. What a renaissance man. Not.

            Furthermore, the trend in recent decades has been away from the medallions being a way for municipalities to raise money and more and more on moving the system towards a feudal like racket where one set of people (medallion owners) get to charge another set (drivers) for the *privilege* of working. Of curse the language used to move the system from municipal revenue generation toward private exploitation would never use the term “feudal” to describe the direction in which things are going.

            Ironically they use terms like “liberalization” and “deregulation” and most ironic of all “freedom”.

            Originally ALL medallions had to be owned by drivers. Not most – but 100%. Most cities required ongoing payments – like a city sticker. But business interests intervened and lobbied for “liberalization”. Soon someone could own more than one. Now ownership moved quickly from the driver to the cab company (this went’ down way back, 1950’s I think).

            Then it was “liberalized” again and people who were not even in the taxi industry could own medallions. Then further “deregulation” came in and upped the number of medallions that someone could own, The trend is clear all over the US: “deregulation” and “liberalization” are the order of the day and the objective of the industry (the ones who run it, (like messers Goodbar and Levine here in Chicago) is a complete and total “free market” in taxi medallions: no limits on how many medallions can be held by any individual or business, no limits on what types of businesses can own them. Not only is this their objective, it’s the clear direction of things and has been been for some time. And they are making money hand over fist as the price of medallions skyrockets.

            In New York City (monopolist) business interests have succeeded in making the medallion system a complete “free market”. Hedge funds are snapping them up left and right and the price has skyrocketed to over 1 MILLION DOLLARS. They want to do the same thing here in Chicago, and are working hard to force the medallion system on Wash DC.

            Of course a complete “free market” in medallions is sort of like a complete “free market” for human beings – in both cases one persons’ free market is at the (big) expense of another.

            The issue most definitely IS medallions.

            Just like human beings should not be purchased and sold, the rights of human beings TO WORK should not be purchased and sold either. That is my opinion.

            But this is the system that you are defending.

          • Barry Korengold

            They’re not allowed to get the insurance, or they don’t want to pay for it?

            Ever heard of Cabulous or Flywheel? Cabulous (now Flywheel) was around before any of these companies, and you can track the cabs the same way, so that’s not innovative. What’s innovative is the way these companies have avoided (broken) the law and allowed fraudulent operators to gain false legitimacy.

          • ClaimsAdjuster

            In my area UberX drivers can get commercial insurance for their vehicle for $4K a year. This compares very favorably with a taxi which costs between $6500 and $13,500 annually. But most of these part time UberX drivers don’t want to pay that kind of money for insurance. So they go uninsured.

            The reality is that these rideshare taxi drivers nor the TNCs will obtain the proper insurance on their own. They won’t do unless the long arm of the law makes them do it.

          • brothenberg

            Will that cover you under your personal travel as well? Once you TCP your vehicle.. I am not sure about using it for personal use.. you’d have to have a designated uberx vehicle.

          • ClaimsAdjuster

            No, you are not covered for personal use under a commercial policy. But in practice, an exclusion for personal use in a commercial policy is difficult to sustain unless the situation is really obvious, such as an accident with family members in the car or one in a location hundreds of miles away from the TNC driver’s normal base of operations. Basically, vehicles are insured for one purpose or another and the premium is based on the risk class.

          • brothenberg

            So unless you are using your vehicle for a full time uberx/lyft/sidecar/etc vehicle getting commercial insurance currently is counter productive right? I drive my scooter normally.. I can TCP my vehicle.. but it hasn’t made financial or legal SENSE even to do it till this stuff is straightened out.. ? My college roommate is neck deep in the insurance industry too, it just hasn’t made sense.

          • ClaimsAdjuster

            If you are using your vehicle at all as a TNC, you have to get commercial insurance. The risks are just too great to do otherwise. Also be aware that the commercial insurance will not cover you for on the job injuries or collision damage in an at-fault accident.

            In some states such as California, Washington and New York for hire drivers are required to carry industrial insurance( aka workmen’s compensation) for on the job injuries. Sometimes the insurance agency will offer collision for a for hire vehicle.

        • Laurel Denver

          That is absolutely true, ClaimsAdjuster, but there is an important qualification to it. Cab drivers have been oppressed for decades–the taxi industry is a mafia-like cabal. The drivers have to pay $120 just to get the car out of the gate. Driving a taxi is the job you do when you can’t do anything else. It’s one step above being homeless. And it’s even worse with the market share evaporating.

          With Uber and Lyft, more money and control go directly to the driver and it is a much better paying job. The 20% cut the Uber and Lyft company receive is far far less a percentage than the cab owning medallion guys. Those guys are rich, and they are hopping mad that someone is changing their iron-like vice grip on this slavery racket they’ve been running for years. They are the worst.

          Most UberX and regular Uber black car drivers come from the cab industry, and nobody is happier about the change than they are.

          I read that 30% of the cabs in the company lots are staying on the lot, which was absolutely unheard of five years ago. There was a loud shot for more taxis, remember? And all the ads on the taxi saying “Drivers Wanted” because no one who drives a taxi can make a living anymore.

          I am a Lyft and Uber devotee–it allows me not to own a car–but recently my phone was dead, so I was forced into taking a taxi. I’d forgotten how rotten they were and how obnoxious and smelly and rude the drivers were. I’ve also noticed the drivers in taxis lately, and they have gone downhill in quality from their previous lows. I am sorry to say this, but often it appears that the taxi company grabbed a bum off the street in the Tenderloin and put him behind the seat. I mean, my driver reaked of bad b.o., had ruddy cheeks and nose and bloodshot blue eyes and looked like an ad for alcoholic rehab. No he was not drunk, but he looked like Charles Bukowski after a bad one last night, and before a good one tonight. Yuck.

      • SF LOCO

        they can drive a cab

      • BenValis

        Terry makes a great point below, that Lyft doesn’t really create jobs, it creates liabilities. And the drivers have absolutely no employee status, no workers comp, no unemployment benefits, nothing. Services like Lyft, Sidecar and Uber take an established business (taxi) where folks were able to buy homes (well, in the East Bay…), raise kids and send them to college, and replaces it with a system full of deception, insurance fraud, liability for other motorists and leads to everyone hustling to make a quick buck on the street.

      • Barry Korengold

        I suppose the 8,000 or so legal, career cabdrivers that must follow the rules and whose jobs your destroying, don’t count. We don’t mind competition, we just want everyone to play by the same rules. We’d have more sympathy if these people weren’t stealing our business by cheating and lying about who they are and what they’re doing.

        • Nelson Hermance

          As I said above: I am an independent website developer and in our business there is no mechanism to prevent someone from competing with me. No medallion system for us;

          I do not consider other new website developers entering the business as “stealing jobs” – mine specifically. That’s life, competition, free market capitalism and it BENEFITS ALL OF US. You included.

          Do you go online? Of course you did, you wrote that comment above. So you benefited from the wide open competition online that allowed you to express your opinion at virtually no cost. Pretty neat for you..I’m doubting that the internet/world wide web would be anything like it is if we had the same kind of absolute limit on the number of people who could have the “right” to be developers.

          But in your own business you want to deny others the the very same right you just took advantage of in theirs?

          Doesn’t seem fair Barry.

          • Barry Korengold

            The internet does not involve flooding the streets with multi-ton vehicles cruising and clogging the streets, adding pollution and wear and tear to the roads. This becomes a public health and safety issue, particularly when drivers get desperate to make money and there are no rules some, but plenty for others. Don’t be fooled, these TNC drivers do stupid and crazy things, just as some rookie cab drivers do. Deregulation of the taxi industry is not the answer. Even restaurants have health regulations they must adhere to. On demand passenger transportation for hire is highly regulated for many reasons such as public health, safety and use of the public rights of ways.

          • Nelson Hermance

            The internet has viruses, spyware, addware, identity theft and scams of all sorts. Did you see what just happened a Target?

            None of these problems would be addressed by limiting the number of people allowed to be web developers to some absolute limit.

            As far as “clogging the streets, adding pollution and war and tear to the roads”, I think you have it backwards: the worst scenario for pollution and wear and tear is single individuals in non shared cars.

            Taxi medallion limits hurt the environment because they force more people into private cars.

  • Nelson Hermance

    All of you Lyft/Uber bashers please read Update 2

    It reads:


    Kara Cross, general counsel for the Personal Insurance Federation of California, an industry group made up of State Farm, Farmers’, Progressive, Allstate, Liberty Mutual, and Mercury, contacted us with some insurance implications for TNC passengers.

    Cross says that if you are injured as a result of riding in a TNC vehicle, you can draw on the $1 million-per-incident coverage TNCs are required to have, but only if the TNC driver is judged to be at fault. If the other vehicle is judged to be at fault, you will have to rely on that driver’s insurance, which will very likely cover a much lower amount than $1 million if it is a private vehicle.


    Lets especially ponder the last sustenance: “If the other vehicle is judged to be at fault, you will have to rely on that driver’s insurance, which will very likely cover a much lower amount than $1 million if it is a private vehicle.”

    That means that the Lyft/Uber liability insurance is BETTER than private liability coverage.

    So why all the griping about the danger Lyft and Uber pose to society.

    • TerryGauchat

      The problem is protection for the Lyft DRIVER… Of course Lyft has arranged excellent protection for the PASSENGERS — that’s where the profit comes from. DRIVERS are just a pesky expensive liability to Lyft, Uber, etc.

    • Barry Korengold

      What if the other driver’s at fault but is uninsured? And what if the Lyft or UberX driver runs someone over when they’re not on a call?

  • David Alatorre

    uber sucks!

    $25 free lyft! only good for the first 10 to use it

    use code fa8dp4j

    put it in before your 1st ride

    • Nelson Hermance

      then use Lyft instead of Uber

      • David Alatorre

        haha just trying to spread my code, i drive for uber too but they don’t give me referral credit like lyft.

  • Tony

    Lyft $25 Code: R8JX6Y

  • Namiko Nazarov

    I do not change anybody opinion, but for people complaining about availability of the cabs in SF I recomend to download flywheel app and see with there own eyes how many taxis available at any moment.This app was developed mich earlier then any other so called tnc apps, and it works only with legal taxi cab companies.You pay taxi rate by the meter using your credit card.P.S If you want to save 10$ from your first ride just type code DGBVVN.Have a nice ride.

  • Nelson Hermance

    The medallion holders – who tend to be millionaire business owners and hedge fund types want the public to *think* that cab drivers are “protected” by the medallion system.

    Nothing could be further from the truth.

    Two good articles that address the subject:


    Key points:
    “Drivers don’t make very much money, because the supply of potential drivers is large.The real scarcity is permission to drive, and so the people who own the permits make the money.”
    in a highly competitive marketplace between rival car-hailing apps, more and more of the revenue is going to end up flowing to the drivers since you’ll essentially be in a war to maximize car availability and therefore ridership.

    2) An in-depth piece in the Boston Globe titled: “A nine-month Globe investigation finds a taxi trade where fleet owners get rich, drivers are frequently fleeced, and the city does little about it.”

    this story has a breakdown of cab driving costs and income in Boston. Medallion owners make MORE THAN DOUBLE the income renting medallions to the drivers as the drivers do – the drivers who do the actual WORK.

    Is it just me or is something deeply wrong with that picture.

    It is crucial that we understand who benefits from the current system and who does not. The beneficiaries of the current system are the medallion owners. Period. Everyone else loses. Cabbies lose, the public loses and the environment loses (because fewer people take cabs).

    What I like about the car sharing concept it that it moves the power dynamic towards the people doing the work and taking the risk.

    read the following over again (I’ve added some caps).

    “in a highly competitive marketplace between rival car-hailing apps, MORE AND MORE OF THE REVENUE IS GOING TO END UP FLOWING TO THE DRIVERS since you’ll essentially be in a war to maximize car availability and therefore ridership.”

    Final note: I am hearing rumors that here in Chicago cabbies are starting to dump their cabs and driver for Uber instead because they can MAKE MORE MONEY. They can make more money because the don’t have to pay or rent a medallion.

    • ClaimsAdjuster

      Yup, all this money is flowing to UberX/Lyft/Sidecar drivers. Yet they don’t insure their vehicles. I know you want to change the subject but the title of the
      “How Many Ride-Share Drivers Are Hiding Status From Insurers?”

      A lot,

      • Nelson Hermance

        They have a gap in their insurance coverage because the insurance industry is barred by law from covering them.

        Liability coverage is provided by Uber/Lyft but they cannot at the moment get comp coverage. That’s my understanding.

        I think they are courageous/gutsy people to persevere. If they crash they lose their car….I think.

        Thank god for gutsy courageous people who move the world forward.

        • ClaimsAdjuster

          “They have a gap in their insurance coverage because the insurance industry is barred by law from covering them.”

          There is no such law. Again, you keep blabbing when you don’t know what you are talking about.

          I know an ex-cab driver who is working for UberX. He bought a new vehicle which he insured with a commercial policy for $4K a year. But he works 60 a week. He has to since UberX’s rates are only $1.63 a mile. It is doesn’t pencil out to make a $30K investment for an automobile, pay gas, and shell out all this money for liability and industrial insurance for so little return.

          So the natural inclination of most of these drivers is to cut corners. A colleague of this driver recently got into an accident while occupied with an passenger who told the other party that the vehicle was UberX. There is no way to tell visually that this was an UberX vehicle because there are no moustaches, markings, distinctive paint job or decals.

          If the customer hadn’t blabbed, this accident would have been covered on the driver’s non-commercial policy.But since it did come out, the driver’s policy was cancelled and it will be very difficult for him to get new coverage.

          • Nelson Hermance

            4K per year for commercial is a lot less than 2K/month for a medallion (which is what it is in Chicago right now).

            Here in Chi-town the word is you can make more money from Uber than the cab companies.

          • ClaimsAdjuster

            $2K amonth for a medallion? What are you talking about? Cab drivers in Chicago pay $350 per week for a shift to rent a taxi. An insured, licensed, maintained vehicle.

          • Nelson Hermance

            Ha ha ha…’s more like $650.


            There was still a driver shortage in Chicago’s taxicab industry. A price war between Garber and Levine ensued. Weekly leases were dropped to as low as $425 per week for a 24 hour taxicab, approximately $100 below the prevailing market price, to attract drivers to their fleets. According to Chicago attorney Charles Goodbar, himself an owner of taxicab medallions, this “put substantial pressure on the small owners to either compete at that lease rate or to sell.”

            That was in the wake of 9-11! Prices are MUCH higher now.

            Look at the middle of the page and note the pictures of Goodbar and Levine. It’s guys like that who are making the real money in this industry not the hard working risk takers who actually do the work.

            Sometimes I find it amazing that any work ethic remains in this country. Goodbar and Levine are classic 1%ers gaming the system to get rich at the expense of everyone else.

            I find it OFFENSIVE that poor struggling people have to pay the likes of Goodbar and Levine for the *right to work*.

          • ClaimsAdjuster

            Nelson, you are just pulling figures out of thin air. Your link stated that “there hasn’t been a lease cap increase since 1994.” The main point of the article is that medallion buyers were paying too much for the licenses because of a driver shortage and insufficienr rentals.

          • ClaimsAdjuster

            Yeah, $4K per year is not that much especially when compared to taxi insurance which costs $6,500 to $13,500 anually. But most of the TNC drivers won’t pay it unless the law makes them. The TNCs won’t because they are scofflaws who think they can get away with dumping their liabilities on the driver and the public.

            You don’t have any idea what “the word” is. My guess is that in Chicago that nobody is making any money because the TNCs have dropped their rates so low and the cab drivers because they have lost so much business. That is what happens when you flood the streets with gypsies.

  • gershyboy

    I was told by an Uberx representative in Chicago that my insurer didn’t need to know that I was doing Uberx trips. It sounded an awful lot like he was proposing insurance fraud and I didn’t pursue the subject further.

    Every personal auto liability policy prohibits coverage if the vehicle is used for fare paying passengers. Not only is the coverage denied, but the policy is subject to cancellation.

  • ClaimsAdjuster

    Uber has a number of lines of business. They started off dispatching licensed limousines which carry the proper insurance. Lyft and Sidecar, on the other hand, have always been involved in insurance fraud by dispatching to private cars that are just covered by non-commercial policies.

    Uber reluctantly decided to jump into the gypsy cab market to compete with Lyft and Sidecar by starting UberX.

    Here is Uber CEO Travis Kalinik before UberX:

    “A Lyft driver does what a driver on Uber does. The only difference is they don’t have a license and they don’t have commercial insurance.”

  • Laurel Denver

    Hey, be accurate here. There is absolutely no question that each ride carries $1 million in insurance for the passengers, the other driver and his car and property, if the rideshare driver is at fault. No question.

    The only question is whether an insurance carrier will pay for damage and injury to the driver and owner of the car. There have been lots of little fender benders, and as far as I’ve heard from the drivers, the insurance companies have paid out with no problem.

    I do agree that in a larger claim, and with some companies, there might be an issue. But that leaves the driver and owner of the car high and dry, NOT the public, NOT the passenger and NOT other drivers/cars involved. $1 Million is not enough, in my opinion, but it IS insurance. And it’s a heck of a lot more than most any driver out there carries.

    Insinuating otherwise is just bad reporting, and a fact check failure.

    • ClaimsAdjuster

      Didn’t you read the article? It is the norm for Lyft/Sidecar/UberX drivers to operate with non-commercial insurance.

      Your claim about fender benders is completely wrong. Insurance companies refuse to pay out in an at-fault accident if they find out that the driver is running a taxi service on his non-commercial policy. Then they also cancel the driver’s insurance.

      The TNC’s excess liability policy only kick in when the driver pushes the accept fare button on his smart phone. It reverts back to the driver’s policy when he hits the dropff button. This means for most of these vehicles that it uninsured outside of these two digital events. That is likely the case in the New Year’s eve fatality accident that Uber says it will not pay for.

      Nothing is actually known about the TNC’s excess liability policy because they won’t make it public on the grounds that it is proprietary. Whether they have uninsured motorist coverage is unknown. If not, the passenger would not be covered if the TNC vehicle is in an accident with an uninsured motorist who was at fault.

      Excess liability coverage is normally excluded if the primary policy (i.e. the driver’s) is invalid. If there is an actual insurance company writing the TNC coverage, as opposed to Google’s bank account, there is a big exclusion that could be invoked if they are hit with a big judgement. Insurance comapnies love exclusions.

      • Laurel Denver

        I read the article. And you are right that the future may be brutal to drivers of these claims. I am just saying–and this is a fact–almost every single fender bender has been paid for by the companies. There have been about two dozen at Lyft that I know of, and the companies paid. That will surely not be true in the future.

        I am also aware that two or three drivers have been cancelled.

        Your comment that “Excess liability coverage is normally excluded if the primary policy (i.e. the driver’s) is invalid” doesn’t hold water. If that’s true, let me know, because I thought the whole point of excess liability or Umbrella Policies, is that they kick in where other policies fail. That’s why they are relatively cheap, because most policies don’t fail.

        Can you comment?

        And when you do, don’t say things like “Did you even read the article” because it comes off as condescending and rude. Thanks.

        • ClaimsAdjuster

          No, the point of excess liability policies is to cover any claim over the limit of liability in the primary policy. An insurance agent with experience with surplus lines explains:

          “But if the policy Lyft has is written the way I would have done it as a company underwriter, it would only respond if the primary policy existed. That is to say, if the driver doesn’t have coverage, which seems likely given all of the above, the excess policy would not provide coverage.

          That is not a capricious decision on my part. As I stated, the primary coverage would cost four times what I charge for the excess. If I allowed my coverage to slip into a primary role I would be getting on a fourth of the premium needed to make an underwriting profit.

          Further, the primary carrier is responsible for the defense costs. That is a huge consideration in pricing, because legal defense can be quite costly.”

          • Laurel Denver

            This is all good info. But the biggest point here that no one is talking about, is the legal issue.

            If a regular dude driving his car gets pulled over and doesn’t have a license and insurance, the police write a ticket. And it costs a lot. Why? Because it’s illegal to drive without insurance and a valid license.

            So: What is keeping the police from pulling over the pink mustache people and asking “May I see your commercial license and commercial insurance proof please?” and then hitting them with two huge tickets right there on the spot? That would solve the problem.

            If I am riding a motorcycle, I need an M1 license and special insurance. If I am driving Lyft or Uber, I am supposedly required to have a commercial note on my license and qualifying insurance. So the same goes with this kind of special driving, right?

            This will solve the problem very quickly. All it takes is the Board of Supervisors making a call to the Police Chief. The word will get out fast.

            (And while they’re at it, they should start ticking pedestrians for jaywalking. It’s an even greater problem in SF.)

          • ClaimsAdjuster

            What about UberX? No moustache or any kind of id.

            The only solution to this is the CPUC require that TNC vehicles be required to show proof of commercial insurance as a prerequisite to their obtaining an operating permit. A sticker identifying the vehicle as a TNC would have to be displayed. This is already done with taxis and limos. Why should the TNCs be exempt?

            The CPUC was over their head when they issued the TNC rules. They were warned repeatedly by insurance industry trade groups, the CHP and the California Insurance Commissioner that the insurance was inadequate. Now they should fix it.

      • Laurel Denver

        Oh, and also. I am talking about fender benders, and all the ones I know about were for claims less than $7,000. Most of them were under $2,000. insurance companies normally pay out those claims with a smile and no investigation. It’s what gets people to buy insurance.

        Anyone who has ever had a larger claim will know how difficult it is to extract a penny from their cold dead hands.

        But the small claims that 98% of all people experience, hey, no problem.

        • ClaimsAdjuster

          These fender bender claims are being paid because the insurance company does not know that the driver is running a taxi business with his private car. But that is insurance fraud. It is not acceptable for the regulatory authorities to allow uninsured cabs on the street that sometimes pay their liabilities by running a scam.

          I know an ex-cab driver who is working for UberX. He bought a new vehicle which he insured with a commercial policy for $4K a year. But he works 60 a week. He has to since UberX’s rates are only $1.63 a mile. It is doesn’t pencil out to make a $30K investment for an automobile, pay gas, and shell out all this money for liability and industrial insurance for so little return.

          So the natural inclination of most of these drivers is to cut corners. A colleague of this driver recently got into an accident while occupied with an passenger. The customer told the other party that the vehicle was UberX. There is no way to tell visually that this was an UberX vehicle because there are no moustaches, markings, distinctive paint job or decals.

          If the customer hadn’t blabbed, this accident would have been covered on the colleague’s non-commercial policy.But since it did come out, the colleague’s policy was cancelled, the claim denied and it will be very difficult for him to get new coverage.

  • Uber Raza

    Uber driver here, and also occasional Lyft driver. There is currently an uproar this week among a few Uber drivers, because the SFPD started writing tickets this past week to drivers.

    According to the message board, here is how it went. After dropping off a passenger…quoting from our chat here…

    “The traffic cop came up and was very friendly, and says, “Good afternoon! License and Insurance, Please!” and when I presented my license and insurance, the officer asked if I was driving Uber–I had a logo in the windshield and I said yes. He says, “Do you have your commercial license and proof of commercial insurance?” I said no, and the officer promptly wrote me a ticket with two infractions on it. Then he said, I can impound your car right now, but if you promise to fix this, I won’t. Get this fixed asap.”

    The uproar is, there is really no way to fix this. You can’t even get a commercial license and commercial plates for a car if you drive personally, never mind insurance.

    The drivers have been hollering for months for Lyft and Uber to provide them insurance. So maybe the SFPD will finally get the message across. I hope this is how the problem will be solved.

    • ClaimsAdjuster

      While you can’t get both, you can get commercial insurance for your UberX ride. You can probably get it for $4K per year. The problem is that most UberX and Lyft part timers don’t want to spend that kind of money.

  • Mark Allen Church

    What many of you fail to mention is WHY these TNCs are able to be so successful in the first place. Since the cab companies have a monopoly on this particular industry, they got away with not doing their jobs. They are rude to passengers, they still only accept cash, and if you want to go certain areas in the city, they will roll up their window and drive away. If they aren’t going to do their jobs, then best believe, someone will step in to do it.

    • ClaimsAdjuster

      Yeah, ownership of smart phones and credit cards are really big in the hood.

  • Diego Ortiz

    I drive for Uber but after reading this I’m going to stop , specially since they want me to pay them back 2 700 dls for allegedly using credits to earn money , here is the story my wife opened an account for Uber earned over 2000 dls in Uber credits by referring people so I started taking her everywhere she went everyday even to work I was her pesonal driver , instead of her riding with somebody else she rode with me so that I could get paid by her credits. Uber found out about this and now they want me to work for them for the next 10 weeks and pay them 270 a week I can barely make 300 a week working 20 hrs so minus the gas um losing money here what do you guys think , should I pay them back ?

  • Jordan

    So whats the difference between Driving for these TNC’s and delivering pizza? You use your car for commercial transportation of pizza’s. Did anyone who used to deliver tell their insurance company, “Hey, Im delivering for Dominoes!” Is it that the insurance companies have to worry about paying for a rider if involved in accident?


Jon Brooks

Jon Brooks is the host and editor of KQED’s health and technology blog, Future of You. He is the former editor of KQED’s daily news blog, News Fix. A veteran blogger, he previously worked for Yahoo! in various news writing and editing roles. He was also the editor of, which documented user-generated content about the financial crisis and recession. Jon is also a playwright whose work has been produced in San Francisco, New York, Italy, and around the U.S. He has written about film for his own blog and studied film at Boston University. He has an MFA in Creative Writing from Brooklyn College.

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