Since guidelines and laws that impact personal injury liability vary by city and state, participation in a sharing economy presents liability risks. By now, most people have probably used an Uber or Lyft or stayed at an Airbnb at least once. If you’re one of the majority, you use the sharing economy. The advantages of the sharing economy are obvious – using peer-to-peer services offer more flexibility and a lower price point than traditional models of transportation or lodging. On the other hand, the sharing economy has a dark side, especially as it pertains to liability after an accident. Individuals who participate in shared services may be held liable for personal injuries.
What is a Sharing Economy?
A sharing economy offers consumers a way to save money and expand options on a variety of services. Over the last few years, the idea of a sharing economy has become popular with consumers around the world. Ride-share companies like Uber and Lyft offer consumers affordable options for public transportation services. Rental companies like Airbnb offer the peer-to-peer rental of apartments, homes and spare bedrooms at affordable rates. With a sharing economy, companies and owners make money on shared services, while consumers gain increased options and better prices. With smartphone apps and easy internet access, consumers now have a variety of shared services at their fingertips. The sharing company is only expected to grow in the years to come, but it presents certain challenges.
Common Risks of the Sharing Economy
Several risks exist in the sharing economy, and they apply to both the party providing the coverage and the customer using it.
- Risks of Car Sharing (Uber, Lyft). Some Uber drivers may find out that insurance companies will not provide coverage for damage incurred by a customer since they are operating their car for profit. Additionally, passengers run the risk of inadequate coverage if they get into an accident with an Uber driver.
- Risks of Home Sharing. Airbnb has its own risks for sellers – not only in terms of insurance, but by opening their doors up to unknown parties in the first place. Additionally, visitors run the risk of renting a home that’s not as pictured in the website or incurring injury from a property that’s not adequately maintained.
Who Is Liable in a Sharing Economy?
One of the biggest risks of the sharing economy is that it lacks regulations and liability is still an evolving area of law. Many of these peer-to-peer services don’t view themselves as traditional companies – rather, they position themselves as platforms where independent parties can come and sell their services. This platform is convenient when it comes to using the sharing economy, but it provides a number of legal headaches, including with regard to personal liability.
Who, for example, should be liable when an Uber or Lyft driver strikes a pedestrian? What happens when an Airbnb host invades a guest’s privacy or attacks them? Who should shoulder the responsibility when a host or driver uses discrimination and denies a ride to someone who is disabled or a different ethnicity?
Liability for Car Sharing Economy
An ongoing battle in the California court system might help set a precedent and shape liability for peer-to-peer services in the years to come. A growing number of Uber drivers are advocating to be employees instead of independent contractors. If they win the legal proceedings ahead, Uber could be liable for more of the damages its drivers incur. This also could lead to similar rulings for other peer-to-peer services. However, this will all depend on how the legal proceedings play out in the future.
Liability for Home Sharing Economy
Liability is unclear in the home sharing economy, as well. Many homeowners insurance policies will not cover damages incurred while a person is renting out their home for profit. As such, the homeowner must purchase additional policies to cover damages that may occur while they are actively renting out their homes to someone else.
How Does the Sharing Economy Affect My Insurance?
The sharing economy affects home and car policies separately. Uber and Lyft drivers get separate insurance policies that kick in when a shift starts. The companies require that all drivers carry their own insurance policies that fulfill state minimums. However, when a driver logs into an app or actively transports a passenger, the companies both offer insurance that applies when a driver causes an accident or is liable for other damages.
If you’ve been involved in an accident at the hands of a sharing economy service in Nevada, contact a Las Vegas personal injury attorney from Cogburn Law Offices today for a free case consultation.