At a presentation for would-be Uber drivers, 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.
Uber drew current and would-be UberX drivers to a Los Angeles, Calif. auto dealership with the promise of an opportunity to get a new car through its financing programs. More than a dozen men and women attended the session – including a reporter from BuzzFeed – one of many that the company has been holding around the country in recent months.
As Uber employee Alanna Nass clicked through a PowerPoint presentation, a would-be driver asked what insurance is required for UberX.
Nass was unequivocal. “You don’t need commercial insurance,” she said. “When you’re on an Uber trip, you’re covered by us.”
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,” Andrew Conway, branch chief of registration policy at the DMV, told BuzzFeed. “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, 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.
