Rideshare Riders Could Get Stuck with Medical Bills in a Crash

This story was originally posted by Stateline, an initiative of the Pew Charitable Trusts.

In the early hours of Sept. 12, 2020, Denver chef Brian Fritts, 32, was riding in the backseat of a Lyft car when another vehicle crashed into it and drove off, leaving him with six crushed vertebrae and a broken jaw.

His life has never been the same. Nor has his pocketbook. A loophole in Colorado’s rideshare insurance laws left him with no payments to cover his medical bills and other expenses. He owed hundreds of thousands of dollars, much of which was not covered by Medicaid, his health insurance.

“I can’t sit up; I can’t stand for very long,” he told the Colorado legislature this month in a House Judiciary Committee hearing. And, he said, he needs more surgery to fix his crooked jaw, a procedure he said he can’t afford.

The Colorado legislature is among several states where lawmakers are trying to address the gap in liability insurance law that harms residents such as Fritts, who lacked car insurance that would have covered him. Bills to either increase or relax such rules also are being considered in Delaware, Tennessee and Washington state this year.

The Colorado bill would require rideshare companies operating in the state to carry $1 million in uninsured motorist coverage for passengers who do not otherwise have adequate auto insurance coverage and are injured by an uninsured motorist or a hit-and-run. The bill passed the House and is up for consideration in the Senate.

In Washington state, there already was a $1 million requirement for covering passengers without auto insurance when they were injured by an uninsured motorist. But this session the state legislature passed a measure that greatly expanded rights for rideshare drivers, requiring minimum pay and sick leave and—in a compromise with the rideshare companies—reduced the amount of required uninsured motorist insurance to a maximum of $300,000. Gov. Jay Inslee, a Democrat, is expected to sign the bill.

The Tennessee bill has been deferred for further study.

Ten states, including populous ones such as California, Illinois, New Jersey and New York, have enacted laws to require $1 million or more in uninsured motorist insurance for Uber/Lyft riders, according to the National Council of Insurance Legislators, a coalition of state lawmakers who serve on committees governing insurance issues.

Those laws come into play in situations such as Fritts’, when the accident is a hit-and-run and the car that caused the accident simply disappears, or when the motorist that caused the crash doesn’t have the proper insurance.

Colorado state Rep. Steven Woodrow, a Democrat who is sponsoring the bill in his state, said companies such as Uber and Lyft are required to carry $1 million in liability insurance in case their driver causes an accident, but nothing for passengers who don’t have auto insurance.

He heard from constituents “who use Uber and Lyft and they had no idea they weren’t covered in the event of a hit-and-run,” he said.

The bill was approved by the Colorado House and is set for a vote soon in the Colorado Senate.

Opponents of the insurance requirements, including the rideshare companies, argue that the cost of carrying uninsured motorist insurance would add up to $1.60 to an average ride; they say that’s too much for incidents that happen only rarely.

In a letter to Colorado Democratic Gov. Jared Polis, Lyft requested that he veto the bill if it does pass and called for further negotiation with industry representatives toward a compromise.

“However, our hope for a negotiated solution is diminished by the speed in which this bill has been rushed through the legislature ...,” the company said in a letter from Jon Walker, the company’s sustainability policy manager.

But backers of the Colorado bill note that many Uber and Lyft riders don’t own a car or carry auto insurance, and think they’ll be covered if they are injured as a customer of the rideshare companies.

Fritts, the injured Colorado chef, said at the hearing he’d rather pay “another $1.60 and be safe.”

Brad Nail, a partner at Converge Public Strategies, a public relations firm that represents Lyft, told the Colorado legislature that the rideshare companies think they are being singled out. The state doesn’t require ordinary automobile owners to carry the same kind of uninsured motorist insurance, he noted in testimony.

“It would cost companies tens of millions annually and raise ride share fares 6%,” he told the Colorado Senate Transportation and Energy Committee. And, he noted, “42% of rides the company provides originate in low-income areas.”

In some states, Lyft and other rideshare companies carry insurance, dubbed MedPay, that covers actual medical bills, but not necessarily pain and suffering, lost future wages and other items for which injured riders can sue, Nail said.

But Colorado attorney Eric Faddis, who represented Fritts and a friend, John Hutchins, who also was in the Lyft car when it crashed and who also suffered multiple injuries, said in a phone interview that there are “likely tens of thousands of folks who are at risk in Colorado and most of them don’t even know it. They don’t have a car, they don’t drive, they don’t have automobile insurance.”

Because of the gap in the law, he said, attorneys “can’t really get them compensation.”

The National Council of Insurance Legislators has developed model language for states to use as a template to govern insurance issues for companies such as Uber and Lyft, including liability insurance requirements should a driver negligently hit someone or cause an accident.

But the model does not address the uninsured motorist or hit-and-run scenario, according to Tom Considine, CEO of the organization.

“Because of the large disparity for state laws for uninsured and underinsured … we deferred to state law,” Considine said in a phone interview. He said the organization has not taken a position on whether states ought to require coverage to help uninsured rideshare customers when they are victims of a hit-and-run or uninsured motorist.