Uber Advises Drivers To Buy Insurance That Leaves Them Uncovered

At a presentation for would-be Uber drivers attended by BuzzFeed News, a company representative advised getting less-expensive “personal” insurance that can leave drivers uncovered and in some cases lead them to incorrectly register their cars in violation of the law.

Uber is steering drivers to purchase auto insurance that leaves them uncovered when they’re trolling for fares and that often forces them to flout the law by lying when they register their automobiles, according to documents, interviews, and an Uber presentation attended by a BuzzFeed News reporter.

The transit giant has been advising California drivers interested in its low-cost UberX service that personal, rather than commercial, insurance is sufficient to fully cover them and their vehicles. But insurance companies insist that’s not the case, and they have refused to pay when Uber drivers have gotten into accidents while on the job. In some instances, Uber’s secondary insurance doesn’t cover drivers either, effectively leaving them on the hook for medical bills and car repairs.

There’s another problem: To qualify for a personal insurance policy in California, a car must be registered with the Department of Motor Vehicles as being for personal use, not commercial use. To get personal insurance, drivers purchasing new vehicles they plan to use for UberX often lie on official state forms that ask whether the vehicle will be driven commercially, according to registration documents, drivers, and auto dealers. Working with lenders, Uber has developed leasing and loan programs that have guided drivers to register Uber vehicles for personal use only.

The DMV says that is improper. “There’s not a shade of gray on it,” said Andrew Conway, branch chief of registration policy at the DMV. “If you use the vehicle for commercial purposes, even occasionally, it has to be registered as commercial.”

He added that anyone who registers Uber cars as personal vehicles is “making a false statement on the report of sale, knowingly.”

Insurance is one of the biggest issues at play in the ballooning ridesharing business. Uber, the industry leader, now operates in 53 countries and more than 120 U.S. cities, providing upwards of a million rides per day as it competes with traditional taxi and limousine services, as well as other mobile-app-based services such as Lyft.

As Uber and competing services grow, the San Francisco ChronicleForbesThe New Yorker, and other publications have written about the industry’s insurance problems. While most of the focus has been on drivers acting alone to conceal their activities from insurers, BuzzFeed News has found that Uber steers some drivers to purchase policies that put them at risk, and that leads them to register their vehicles incorrectly.

While Uber offers limousine services that carry commercial insurance, much of its growth has been fueled by the UberX program, which allows virtually anyone to use their own car for hire. Some drivers have little experience with passenger transportation and rely on Uber to direct them on critical issues including insurance.

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