Ridesharing service companies, termed Transportation Network Companies (TNCs) such as Uber and Lyft, and their self-employed drivers, are now subject to new laws in Ohio. These new laws which go into effect March 23, 2016 were enacted to address a common “gap” in insurance coverage whereby TNC drivers would find themselves driving uninsured during the point when the driver was logged in to the TNC’s network application but had not yet accepted a ride request. Many private auto insurance providers considered this activity commercial and not covered by the driver’s private insurance policy if the driver was logged in to the TNCs network. The TNC’s own insurance coverage didn’t kick in until the driver accepted a ride request, thus creating an uninsured “gap.”
Under the new law, TNC drivers will be required to maintain minimum coverage during this “gap” period in the amount of $50,000 for bodily injury or death of a person, $100,000 for bodily injury or death of two or more persons, and $25,000 for property damage. Drivers will also be required to maintain minimum coverage of $1 Million, for bodily injury or death of one or more persons and property damage, from the point when a TNC driver accepts a ride request to the point when the last rider has left the TNC driver’s vehicle. Notably, the minimum coverage may be satisfied by either a policy maintained by the TNC driver personally, a policy maintained by the TNC, or a combination of both.
The new law also creates a carve out provision for TNCs whereby the TNC drivers will not be considered an employee for purposes of Ohio law regarding minimum fair wage standards, workers’ compensation, unemployment, semimonthly payment of wages, and whistle blower protection.
The law also requires TNCs to disclose that a driver’s activity as a TNC driver may violate the terms of any lien against the driver’s vehicle such as car loan or lease. Prospective TNC drivers, who now must be at least 19 years old, will also be subject to criminal background checks, including the national sex offender registry, and reviewed for certain traffic and safety violations. The law also creates a zero tolerance standard for driving under the influence of alcohol or drugs, even when merely logged in to the TNC’s network.
Riders will now be able to see a photo of the driver before entering the vehicle and will also be given the license number in advance.
In sum, TNC drivers will be required to:
- Carry $50,000/$100,000/$25,000 liability coverage while only logged in to a TNC digital network;
- Carry 1 Million liability coverage after accepting a transportation request until all passengers have exited the driver’s vehicle;
- Abstain from consuming any alcohol or drugs of abuse while transporting passengers or even while logged in to the TNC digital network.
TNC drivers should also review carefully the terms of their contract with their TNC to make sure they are properly insured and to confirm driving for a TNC does not violate the terms of either a loan or a lease they may have on the vehicle they use for ridesharing purposes.