Liability in Carsharing Accidents
Explains How Liability Works in Carsharing Accidents
IntroductionThe “sharing economy” generates a new form of economic activity through digital platforms, allowing people to create and share goods and services with one another. Representative of a generational shift in consumer values and purchasing preferences, the sharing economy is diverse, and continues to grow every day with different types of online applications that provide goods, services, rides, vacation stays, money, clothes, and more to consumers in ways previously unimagined. The term “sharing economy” or “sharing businesses” was first used with respect to businesses that facilitated peer-to-peer sharing of tangible goods or real property. The definitive example of a sharing business focused on physical goods is Airbnb, which helps consumers rent out their homes to travelers. Over time, the sharing economy category has come to include companies that share a combination of labor and property, or labor only. The ride-sharing company, Uber, shares both labor and property–a car owner contributes both his physical property (a car) and his time to drive customers to their destination. Other labor-based sharing services, such as Zaarly and TaskRabbit, offer services on demand, such as furniture assembly, cleaning, shopping, and moving services. The distinction between property sharing and service sharing can be somewhat vague. For instance, some labor is involved in sharing property (e.g., cleaning or packaging the property between transactions). However, property sharing companies are businesses that rent access to real property or a tangible good. The labor associated with a rental service is incidental to the property and primarily consists of transferring possession of the property to the customer. The customer exercises control over the property while rented. Turo and Getaround are the latest entries into the property sharing economy. Think of it as an “Airbnb for cars”. Unlike Uber or Lyft, which are “ride-sharing”, car sharing companies such as Getaround and Turo offer to rent you someone’s car. The car owners place their vehicle for rent by the hour or by the day or week on the car sharing company app. You may ask yourself why anyone would rent their car to a complete stranger. The answer is obviously financial as it provides additional income to users of the App.
Turo Car AccidentsTuro was established in San Francisco in 2010. It was formerly known as RelayRides. It has more than 200 employees. Turo is generally accepted as the leading carsharing company in the world with more than 4 million registered users and in excess of 170,000 available cars for rent. Turo does not own any vehicles so all the available cars are privately owned. Turo operates widely throughout the US as well as in Germany, the UK and Canada. When a Turo vehicle is involved in an accident, the insurance situation is basically the same as other carsharing companies like Getaround. Since Turo is not an insurance company and does not insure Hosts or Guests. However, Turo does make Protection Plans available to US Hosts and US Guests. The Liberty Mutual Policy insures Hosts against liability to thirdparties for bodily injury and property damage resulting from the use of the reserved car during the reservation, up to a combined single limit of $1,000,000. The Liberty Mutual Policy provides the minimum amount of PIP coverage allowed by law in those few states where PIP coverage is required by law and cannot be waived. An injured person may have $1M in coverage available but since uninsured benefits are not required in Florida, Turo does not provide UM coverage. NOTE: Many private passenger automobile insurance policies exclude coverage for peer to peer car sharing, meaning that the Host’s policy likely does not insure the vehicle during the reservation period (including the delivery). Some policies may, however, still provide coverage and Hosts should talk to their own insurance company or advisor about the applicability of their own insurance.
Getaround Car AccidentsIn 2009, Getaround was founded in San Francisco. It was launched at the TechCrunch Disrupt in 2011. It began in Portland Oregon with the assistance of a Federal Highway Administration grant of more than $1.7 billion. As recently as April 2019, Getaround bought the carsharing company Drivy for approximately $300 million. It operates in Washington DC, Denver, Los Angeles, San Diego, Atlanta, Philadelphia, Seattle, New Jersey, San Francisco, Boston, Chicago and South Florida including Miami. Getaround provides $1 million in liability coverage for third party accidents. This means that if a Getaround renter causes an accident and someone is injured, then there will likely be $1Million in available insurance to pay for the damages and injuries of the injured person.