Hitching a Ride: Why Ridesharing Companies are facing so Many Legal Problems

Dixie Somers

January 07, 2015

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They came on like a storm, growing in popularity seemingly overnight. Ridesharing apps cruised their way into the spotlight amidst praise for upsetting the transportation industry, but along the way, they're accruing a matching amount of legal issues. But why? How can there be so many problems surrounding something so straightforward? Read on to learn about the legal battles that ride sharing companies like Uber and Lyft are facing, and what the future holds for their business:

They Bypass Local Regulations

This fight is mainly being picked by taxi services and is one of the biggest issues facing ridesharing programs. All across the country, from Seattle to Atlanta, to Maryland, taxi companies are suing Uber and Lyft over how unregulated they are. Taxi companies need to abide by a list of rules, including having commercial driver’s licenses, undergoing regular car inspections, and following strict pricing models, while Uber and Lyft drivers simply need a valid license, a functioning car, and to be a certain age. Taxi companies claim they welcome the competition and simply want Uber and Lyft to follow the same regulations, but several of the lawsuits carry injunctions, which would stop Uber and Lyft from operating there until the suit is settled.

They are not ADA Compliant

A lesser-talked about problem facing Uber and Lyft is their lack of Americans with Disabilities Act friendly cars. This is irrelevant to private taxi services; under the ADA, they must have cars available that are wheelchair compatible. But the virtue of ridesharing apps is just about anyone can install the app and become a driver-- generally, people without cars specially fitted to accommodate wheelchairs. So far, plaintiffs in Texas have filed lawsuits against Uber and Lyft over this problem.

They Face Insurance Liabilities

So far, 14 states have warned passengers against using rideshare programs because there is a gap in insurance coverage. According to a Spokane auto accident lawyer, because anyone can be a driver for these ride sharing companies, there is no commercial liability coverage like there would be in a regular taxi cab. Instead, the driver's insurance is meant to cover passengers. But those claims can be denied. Several states are pushing for rideshare-specific legislation to repair these holes, but none has yet passed a law.

Airports Don't Like Them

Houston, San Francisco, and Chicago have all begun to consider banning rideshare programs from operating at airports, just because it steals profits from the airports themselves. San Francisco took it a step farther, placing drivers under citizen's arrest for trespassing when they attempted to pick up their customers.

Although ride sharing companies have gained a lot of traction in months past, they will have to address the legal issues above if they plan to do business successfully. As with any new technology or business concept, a few bumps in the road are to be expected. Those companies who can resolve legal battles and rise triumphant will likely be here to stay, while those who buckle under legal pressure might be seeing the end of the road sooner than expected.