Nina Brav

Writer, Blogger, Entrepreneur

Cogburn Law Essay

Should Uber and Lyft drivers be subject to the same special insurance and liability rules that taxicabs operate under?

By Marina Mehrtens (


              “Oh my gosh,” my driver exclaimed. She propped open her car door to survey the damage. “Are you okay?” she asked.

              I rubbed my arm. It was a little tense from the bang against the car window but overall, I was more shocked than injured. When I woke up that hot morning in May, I had not expected my Uber driver to get into a car accident. In fact, I had never really thought about the possibility of my being a part of an Uber car accident at all.

              Whether it was my driver’s fault for making too wide a u-turn or the other driver’s fault for following too closely, I did not really care. I was just thankful that in my hurry I had not forgotten to put on my seat belt and that the accident was minor. Nonetheless, that moment triggered a number of events. I had to use the Uber application to report the accident. I made a visit to Urgent Care to confirm that my injuries were as minor as they felt. Finally, I received several calls from Uber’s insurance company asking me to describe the accident in detail.

              My accident was not the first to take place in an Uber and it will not be the last. This is one of many reasons that insurance, liability, and safety regulations for ride share companies, like Uber and Lyft, are hot topics. Over the past three years, cities and states have been more actively regulating Transportation Network Companies (TNCs); however, there are still regulatory gaps that create risk for TNC consumers.

              My car accident took place in North Carolina in May of 2018. Per North Carolina Senate Bill 54[1], my Uber driver was required to have primary automobile liability insurance in the amount of $1,500,000 to cover death, injury, or destruction of property while I was riding in her car.

              Had my accident taken place in a taxicab, the insurance requirements would have been quite different. Raleigh Regional Newspaper, The News and Observer, notes that in May of 2018, “[Taxi] liability requirements were the same as the minimum required for any motorist in North Carolina: $30,000 for bodily injury or death; $60,000 for bodily injury or death of two or more people; and $25,000 for property.[2]

              Thankfully, my injuries were not severe, but had they been, Uber or Lyft would have provided me more protection as a consumer.

              Insurance is just one piece of the consumer protection equation. One of the most serious areas of concern for TNCs is their process for conducting background checks. Per, Cogburn Law Office’s Overview of Taxicab Liability, taxi drivers undergo extensive fitness, medical, and training certification, along with a more rigorous background check process. “Drivers cannot have been:

  • Convicted of any felony in the past five years.
  • Been found guilty of driving under the influence within the previous three years.
  • Been convicted of any offense involving the sale of controlled substances, dangerous drugs or narcotics.[3]

              In Raleigh, North Carolina, this background check and certification process requires finger printing, a copy of the drivers’ driving history, and a medical exam. The driver must pass a 50 question test, a drug test, and they must attend a new driver class.[4]

              Uber, by comparison, states on its website that although their evaluation of background checks may vary from city to city, Uber investigates drivers for “major driving violations or a recent history of minor driving violations or convictions for felonies, violent crimes, sexual offenses, and registered sex offender status, among other types of criminal records.[5]

              This review process is notably less comprehensive than the background check requirements for Raleigh taxicab drivers. Additionally, CNN reports that there have been thousands of instances of Uber drivers passing their background checks despite having been convicted of felonies.[6]

              There are clearly stark differences between the insurance, safety, inspection, and background check requirements for taxis and TNCs. The taxi industry and TNCs, as comparable businesses, should be consistent in how they regulate. TNCs should be required to meet the same special insurance requirements of taxi drivers in their jurisdiction. In North Carolina, we see that Uber's regulations already surpass those of local taxicabs. Taxicab companies and TNCs should also have the same background check requirements. Like taxis, TNC's background checks should be recurring over a regular period, and should also include fingerprinting and a review of the driver's driving history.

             That said, demanding that TNCs meet the stringent requirements of taxicabs could stifle the innovation and accessibility that Uber and its counterparts have created in the marketplace. Part of what makes TNCs so valuable is not only the improved process for supplying drivers to riders, but also the employment opportunities it has created in an industry that previously had high barriers to entry. Increased regulation will add cost to TNC businesses. If that cost is passed on to TNC driver applicants, it could limit participation.

             Ultimately, it's regulators' responsibility to improve insurance and liability requirements for TNCs. With consumer safety and protection in mind, regulators should create and enforce consistent regulations for both taxi companies and TNCs.  Ideally,  they could accomplish this without significantly limiting the accessibility that helped make this new segment of the transportation industry so successful and valuable.