During the debate over the new Houston city ordinance allowing “ridesharing” apps like Uber, Lyft, and Sidecar to operate in Houston, there was a great deal of discussion regarding insurance coverage issues. Last month, I discussed some of those issues and how they were addressed by the Houston ordinance. However, given the vociferous objections raised by the taxi industry, perhaps we should examine how their own insurance standards measure up to those they’ve sought to impose on ridesharing services.
Under the new city ordinance, ridesharing services like Uber (called “transportation network companies” in the ordinance) are required to carry at least $1 million “per accident” in commercial auto liability that covers each of their drivers from the time the driver accepts a trip request on the app to the time the driver drops the passenger off at the passenger’s final destination. The company is also required to provide “contingent” coverage (meaning it only kicks in when the driver’s personal insurance denies coverage) when driver has the app turned but has not been hired. This is to cover a gray area period when both the commercial insurer and the driver’s personal insurance might arguably deny coverage.
Are taxi companies required to provide the same kind of insurance? The answer in Houston is “No.” First, just like Uber and Lyft, most taxi companies assert that their drivers are not employees, but rather “independent contractors” for whose conduct they are not liable, and courts often side with taxi companies in this assertion. However, while Uber must provide insurance that covers their drivers for up to $1 million while they are under hire, Houston taxi companies only have to provide the minimum limits required for all drivers under Texas law, which is $30,000 per person injured and $60,000 per accident.
Taxi drivers are among the few commercial drivers that can carry so little insurance coverage in Houston. Under state and city law, commercial truck drivers, tow truck drivers, limo chauffeurs, jitney drivers, and even parking valets, and pedicab operators all must carry far more liability insurance coverage than taxi drivers. While all of these types of drivers other than taxi drivers have to carry $300,000, $500,000, or even $1 million in insurance, few, if any, taxi companies choose to provide more than the $30,000/$60,000 minimum limits.
While the City of Houston has done much to see to it that Uber drivers are well-insured, taxi drivers often remain woefully underinsured. Despite the high-profile discussion of insurance for ridesharing drivers, it remains to be seen whether the City Council will ever require taxi drivers to carry the same kind of insurance as other commercial drivers in Houston.
In the meantime, if you or someone you know has been injured in an accident with a taxi or other commercial vehicle, contact an attorney at Abraham, Watkins, Nichols, Agosto, Aziz & Stogner by calling 713-396-3964 or toll free at 800-594-4884.