The law in California is that insurance follows the car first and foremost. However, there may be an exclusion in the driver’s personal insurance policy if the vehicle is being used in a business. A check of the policy needs to be done before a final decision can be made on this. Therefore, all Uber drives should check with their insurance agents / carriers to see if theirs is a policy of insurance excluding business operations in the typical auto policy. California has gotten around this problem by recently passing legislation that would mandate that Uber / Lyft have secondary liability after either the underlying policy of the driver has been exhausted and/or the carrier denies coverage. The issue is raging in the courts due to the exposure of Uber to both civil and/or criminal liability for the actions of their drivers. Uber has taken the position that the drivers are not employees. Their position has been that the drives are independent contractors. They maintain that the drives work when and if they want. Uber / Lyft and other ride-sharing companies also insist that drivers control their own hours and perform their functions in the manner they want. California courts have ascertained whether a person in an employee or independent contractor by focusing on the major issue of control. Does the purported employer control the hours worked, the manner of the work, the rate of pay, etc.
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In other states, Uber drivers have been charged criminally for rape and assorted other criminal charges. Uber has denied responsibility for these actions based upon the fact that criminal actions of a person may absolve a purported employer for civil liability. However, if Uber did not properly screen the drivers to ascertain if they had insurance and a good driving record and no criminal record, they could potentially be held liable for civil liability if they were negligent in not doing their due diligence by allowing persons to have access to their information (data to pick up people) whom they knew or should have known were unfit to drive.
As of yet there is no clear litmus test on these issues. This is an evolving situation.