The wrongful-death complaint filed Monday against Uber and a former driver could become a landmark case in holding app-based ride services responsible in fatal accidents for the first time since the companies infiltrated the transportation marketplace in recent years.
Since September, when the California Public Utilities Commission adopted regulations for “transportation network companies” such as Uber, Lyft and Sidecar, the ride services have been subject to a minimum of $1 million-per-incident coverage for incidents involving vehicles and drivers in transit to or during a trip.
Monday’s legal filing, the precursor to a lawsuit, is centered on the New Year’s Eve death of 6-year-old Sophia Liu, who was struck and killed while crossing a street in the Tenderloin with her mother and brother, both of whom survived.
Syed Muzzafar, 57, was charged in connection with the accident and is out on bail.
Uber has denied responsibility and liability for the incident, citing the fact that Muzzafar told police he was awaiting a fare while driving around.
“The driver was not providing services on the Uber system during the time of the accident,” wrote spokesman Andrew Noyes in a company blog shortly after the incident.
Christopher Dolan, who is representing the Liu family, said Muzzafar was engaging in commercial activity waiting for an Uber fare and thus the company is liable for his actions.
“Our lawsuit is going to make sure that Uber is not going to be able to get out of what is hundreds of years of well-established law regarding transportation companies just by some technical trick,” said Dolan, who writes a column for The San Francisco Examiner. “This case is the first of its kind in the country and I hope it sets a model for the other … cities that they operate, to hold them responsible.”
While Uber refuses to accept responsibility for a driver who hasn’t been hailed or is not carrying a passenger at the time of a collision or crash, drivers can run into problems with their own coverage as well.
Private insurance companies are declining coverage for ride service drivers who are looking for fares, Dolan said.
“Both the driver and the public are getting screwed,” he said.
Muzzafar’s attorney, Graham Archer, said his client had personal insurance and that Uber should cover claims because, “He was driving for Uber at the time of the accident.”
“The position that Uber is taking creates a huge insurance hole that exists for every one of their drivers during a vast portion of the time that they are on the road on Uber’s behalf,” Archer said. “I don’t think that’s good public policy.”
If Uber were to cover its “partners” so long as they had the app turned on, what would stop drivers from claiming they were engaging in commercial activity even when they were not?
Dolan said it’s Uber’s problem to fix their business model.
“They shouldn’t be able to get out of covering the people they harm by this concern of their own employees taking advantage of them,” he said.
Uber refused to comment on the case Monday.
Kara Cross, general counsel for the Personal Insurance Federation of California, which represents personal automobile and homeowner insurance companies, said Monday that there is a need for clarity at the CPUC level on when commercial liability insurance is triggered.
“It’s going to be a growing problem, definitely,” she said.
The insurance industry was anticipating an accident like this would occur, according to Cross.
“It’s kind of a matter of time before you have a situation where folks are going to realize that perhaps there wasn’t as much coverage as they thought,” she said.
Among other allegations in the complaint is that Uber’s app is a “distraction” to drivers, Dolan said. When a customer requests a ride, the app gives the driver an audible notification that he or she can simply tap the screen to accept. But Dolan argues that the app allows drivers to see where other drivers are in the area, as well as text and call to acknowledge a fare.
“They could do that through some audio accept or decline rather than the need to tap the screen,” Dolan said.