How Liability Works in Uber and Lyft Accident Claims

Rideshare services like Uber and Lyft have become part of everyday life for many people in South Dakota. They are convenient and widely used. But what happens when the car you are riding in, or a rideshare vehicle that hits your car, is involved in an accident? The answer is more complicated than a typical car crash claim, and understanding how liability works could be the difference between recovering what you need and being left with nothing.

Rideshare Companies Are Treated Differently Under the Law

South Dakota law classifies Uber and Lyft as “transportation network companies,” or TNCs. This matters because it determines how these companies are regulated and what insurance applies when an accident occurs. Unlike traditional taxi companies, TNCs do not employ their drivers directly. Rideshare drivers are classified as independent contractors, which rideshare companies often use to argue they should not be held responsible for a driver’s negligence.

That classification does not mean you are without options. South Dakota law under SDCL Chapter 32-40 sets specific insurance requirements for rideshare drivers and companies depending on what the driver was doing at the moment of the crash.

How the Driver’s App Status Changes Everything

The most critical factor in an Uber or Lyft accident claim is whether the driver was logged into the app and, if so, what phase of a ride they were in. There are generally three situations:

• App is off: The driver’s personal auto insurance applies, just like any other driver.
• App is on, no ride accepted yet: Under SDCL § 32-40-8, the TNC must provide at least $50,000 in bodily injury coverage per person and $100,000 per accident.
• Ride accepted or passenger in the vehicle: Under SDCL § 32-40-9, primary liability insurance of at least $1 million must be in place.

This tiered structure means the coverage available to you depends heavily on verifying the driver’s app status at the exact moment of the crash. Rideshare companies have access to this data, and they do not always make it easy to obtain.

Additional Complications to Watch For

Even with substantial insurance available, these claims can get complicated quickly. Personal auto insurers are permitted under SDCL § 32-40-16 to exclude all coverage while a driver is logged into a TNC’s digital network. That means if the TNC’s coverage is disputed, a victim can be caught in the middle with no clear source of payment. There may also be questions about whether a third party, such as another driver who caused the collision, bears some or all of the responsibility.

Speak With Hoy Law About Your Rideshare Accident

If you were injured in a rideshare accident in Sioux Falls or elsewhere in South Dakota, you should not try to sort out these insurance layers on your own. At Hoy Law, our Sioux Falls rideshare accident attorneys understand how TNC liability works under South Dakota law and know how to build a case that holds the right parties accountable. Contact us today for a free consultation and let us help you pursue the compensation you are owed.

Source:

law.justia.com/codes/south-dakota/title-32/chapter-40/section-32-40-9/