‘Gig Economy’ Clouds Insurance Claim Issues

Lucas Root says he doesn’t remember seeing the door that opened up in front of his bike, knocking him to the pavement and breaking out three teeth.

But when he learned the driver was working for Uber, the app-based ride-hailing service, he saw an insurance nightmare ahead.

Root had worked briefly for an on-demand bicycle delivery service whose couriers use their own bicycles, so he knew that the so-called “gig economy” tends to muddy issues of labor rules and who’s responsible when things go wrong.

“I realized how complicated this was going to be from the start,” Root said.

Indeed, two months after the July 2 crash for which the driver was cited by police, the driver’s personal insurer declined to cover the loss. Three months later, Uber says its insurer is still reviewing the claim.

Root has filed a lawsuit in Multnomah County Circuit Court against Uber and the driver, seeking to recover up to $250,000 in medical costs.

“This accident will be covered by Uber’s commercial insurance,” Uber spokeswoman Kayla Whaling said Wednesday. “Uber holds an insurance policy for up to a million dollars for every driver who is on a trip in Portland.”

As ride-hailing companies like Uber and Lyft gain traction in communities across the country, regulators have raised concerns about how their drivers are insured.

Typical car insurance policies don’t cover commercial driving. Some insurers have begun offering policies that are compatible with driving for ride-hailing companies, but they’re only available in certain markets.

The companies have boosted their coverage after high-profile crashes, including one in which an Uber driver struck and killed a 6-year-old girl in San Francisco, and lawmakers in some states have set requirements even higher.

Portland has legalized ride-hailing services for a trial period as it hammers out final governing rules. The Portland City Council was set to discuss a new regulatory scheme this month, but the discussion was postponed and hasn’t been rescheduled.

Root was on his way to the Ristretto Roasters coffee shop in Portland on July 2 when, according to a police report, 55-year-old Viktor Pavenko stopped to pick up a passenger. He opened his driver’s side door, he told police, and Root, 30, crashed his bicycle into the door and fell to the pavement.

Pavenko was cited for improper opening of a door. He has pleaded not guilty, according to court records. He and his attorney did not return messages seeking comment.

Police recorded Pavenko’s personal auto insurance information, but Root’s attorney, Michael Colbach, said Pavenko’s insurer wouldn’t cover the liability because Pavenko was driving for hire at the time. The company, Liberty Mutual, is not included in the lawsuit.

“A lot of people assume their personal insurance will cover them,” said Marie Dodds, a spokeswoman for AAA Oregon/Idaho. “But it’s uncharted territory. When you use a service like Uber or Lyft, you can’t just assume you’re going to be covered.”

In Oregon, Uber and Lyft both provide $1 million in commercial liability coverage that kicks in when a ride is confirmed and stays in effect until the passenger is dropped off. They provide a smaller amount of coverage when a driver is logged into the app but hasn’t accepted a fare.

The companies say they teach drivers to present the commercial insurance information, a digital version of which is provided in the dispatching app, if they’re pulled over or are involved in an accident while signed in.