What Happens When Two Lyft Drivers Collide?

Jack Baruth
by Jack Baruth
what happens when two lyft drivers collide

True story: when my pal “Creighton” decided to start using his Charger Hellcat for Uber, he called his insurance company and had them upgrade his policy to commercial status. Doing so pretty much wiped out any profit that he was going to make as an Uber driver, but he still made the call because he’s the kind of person who doesn’t like to take unnecessary risks.

Getting rideshare-specific insurance isn’t always prohibitive, but during my conversations with various Uber and Lyft drivers I’ve yet to hear of anybody besides Creighton actually ponying-up for real additional coverage. Most of these people are living pretty close to the bone and they don’t really think they have that much to lose in the first place. Plus, there’s the fact that both Uber and Lyft offer some additional coverage as part of their driver agreement.

That’s the theory of it, anyway. What happens when two Lyft drivers collide? Yesterday, someone found out.

This post appeared on Tuesday afternoon on the Reddit “personal finance” group:

last Saturday night, my partner had passengers in her car when she got in a minor collision with another (ironically) Lyft driver who was between rides. My partners car had substantial damage, and was undrivable. Since the accident happened at an intersection where a local rapid commute light rail track ran through, local transit authorities called a tow company on their own accord, which promptly came and stole her vehicle to be taken to a tow yard while we were on the phone with our insurance making arrangements for our own tow truck that insurance would cover. The officer on scene deemed no driver was at fault, and did not make a report. Now 3 days have passed, and the car is still in the tow yard, racking up storage fees. Our insurance doesn’t want to touch the case since it was a Lyft incident, and won’t even cover a rental car while we get everything sorted out. Today, finally, someone got in touch with us from Lyft saying they will not cover any towing or storage fees ($300), and they have a $2,500 deductable. We are both college students, and while financially responsible, cannot afford that kind of money for repairs. Does anyone have any advice to offer for what to do next? We feel as though we have exhausted all options, filing claims with both sides, but getting shut down either way we go. Any advice is appreciated.

EDIT – Thank you all for your contributions to the post. Even just having someone else pitch their opinion on the case is reassuring for us. Ultimately it all boils down to us taking a financial hit, but this is a huge lesson to everyone who drives for a ride share company to check insurance coverage. I will be spreading awareness of this on social media so others don’t get caught in the trap.

You can read the original post, and hundreds of responses, here. I took a brief look at the original poster’s personal history to see whether he meant “business partner” when he said “partner.” From what I can tell he really means either “girlfriend” or “wife,” but he wrote partner for the same reason that some Americans have lately fallen in love with writing and saying “shite.”

He’s also a pretty talented snowboarder who seems to go snowboarding a lot at some non-cheap places but can’t come up with the $2,500 deductible. I can sympathize. There were a lot of times in my life where I was riding around on a $900 BMX bike with ten bucks in my pocket.

The general consensus is that the “partner” is about to get dropped by Liberty Mutual in a manner that will make it extremely expensive for her to get insurance next time. Another bit of general consensus: she’s lucky the passengers weren’t injured. Many courts don’t have much concept of a limit when it comes to the amount they will award to injured passengers in your car crash; add in the slight whiff of commercial enterprise and things are likely to get much, much worse.

I cannot help but mention that this incident neatly encapsulates many of my personal difficulties with the “gig economy” in general and Uber/AirBNB/Turo-style services in particular: the corporations get their money regardless and virtually all of the risk is passed along to someone whose personal history and choices usually serve as stark demonstration of their inability to adequately judge risk and reward.

Furthermore, if you’re a college student, you shouldn’t be horking around Salt Lake or wherever driving for Lyft. You should either be working a real job or studying so you can get out of school faster. What’s happening here is that student loan and/or parental contribution money is being used behind the scenes to subsidize the vehicle that is being used for Lyft. When the car wears out or needs major repairs, these students will have the same hands-up-don’t-shoot attitude that they are displaying about this crash. If you’re not able to come up with $2,500 to fix a car from a crash or a mechanical issue caused by turning it into a low-rent taxi, you shouldn’t be driving for Lyft… and if you do have the money, what are you wasting your time for?

From my perspective, there are only two acceptable reasons to be a rideshare driver. The first is to frighten people with your Hellcat. The second is to insert yourself into fascinating situations. But what do I know? I’ve wasted enough money on cars to fix these kids’ problem two hundred times over.

[Image: Wikimedia Commons ( CC BY-SA 3.0); Spiros Vathis/ Flickr ( CC BY-ND 2.0)]

Join the conversation
3 of 73 comments
  • JustPassinThru JustPassinThru on Jan 31, 2018

    I have wondered about the Commercial Insurance situation. But maybe this will clarify things a bit. I'm in Montana. My carrier is State Farm. This part of Montana is rapidly growing with new arrivals - mostly from California but some Eastern migration also. My agent has a new sales junior agent in his office - a young guy, about 25. He and his brother came out here together. He got a job as an agent with State Farm, even though he had some railroad experience and could have gotten on with Montana Rail Link here. Actually, in many ways, it may be the wiser choice. His younger brother isn't doing so well. He's working with Uber, which opened up here a year ago. Now, waiting for eligibility for my own pension, in a few months (age 60) I'd looked into driving with Uber as well. Turns out my old car is too old to carry real-live humans; but I can do the Uber Eats food-delivery. Like Grub Hub. That's probably better; and there's almost as much demand for it. No signs on the car; and no need for a daily washing. (of the CAR...) I'd talked a bit with the kid about how his brother is doing Uber - phone, cell-phone plans...and, yes, insurance. He told me his brother only has personal vehicle insurance; and the agent who owns the office, didn't advise commercial insurance. Now, that may change and probably will; but for now, in this state, State Farm is okay with such an arrangement. And Jack is right - Commercial Insurance will eat up a lot of the profit. It's hard to gross more than $1100 a month out of Uber, here; and now that Verizon downgraded their limited-data plans, the cheapest plan that will run the Uber app is $65 a month. Then gas; and wear on the vehicle... It's a hard way to make a living. A good way to turn spare time into cash; but to really depend on it...it's not good.

    • FormerFF FormerFF on Jan 31, 2018

      Downside of driving for Uber Eata or Grubhub - your car's going to smell like stale food in short order.

  • Nick_515 Nick_515 on Jan 31, 2018

    "From what I can tell he really means either “girlfriend” or “wife,” but he wrote partner for the same reason that some Americans have lately fallen in love with writing and saying “shite.” Jack, not quite sure how you developed that opinion, but you appear fairly uninformed about the important 'subcultures' that have used "partner" in lieu of wife(y) or husband for quite some time now. I do not actually like calling my partner my "wife" all that much, although i certainly do sometimes, but way less often than I call her my "spouse." You may not like it, and the snark wouldn't bother me, but it's legit whether you like it or not.

  • ToolGuy 404 error on the product link. Which probably isn't terrific marketing on TTAC's part. https://thinkwarestore.com/product/f200-pro-ca
  • ToolGuy Second picture: Do you like pegboard storage? (I don't.)
  • ToolGuy "WHAT???"(old 'I was in the artillery' joke)
  • ToolGuy Oh and this.
  • ToolGuy "The boroughs of Bexley, Bromley, Hillingdon, and Harrow have likewise announced plans to take legal action to force a possible judicial review..."But: "In Hartford, Hereford, and Hampshire... Hurricanes hardly happen."