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An uber double-standard: Why not have $1 million liability limits for taxis?

February 20, 2015 by Steven M. Gursten

House bill 4032, the ‘Uber’ bll, proposes $1 million bodily injury liability coverage for app-based, ride-sharing vehicles, but why do taxis only require $20,000?

Something’s wrong here. Taxis have been driving around Metro Detroit for a very long time. And every year, they cause a number of crash-related injuries and deaths. In cities like Detroit, where a larger-than-average percentage of the population is dependent on taxi transportation services, hundreds of people are injured annually in taxi cab related-crashes. Most of these people are stuck with taxi cabs that are insured with $50,000 in bodily injury insurance. That’s only a little better than the  minimum liability bodily injury insurance limits that we require in Michigan, which is $20,000 for taxis.

Whether $20,000 or 50,000, this doesn’t even begin to fairly compensate the accident victims and their families for the injuries and pain and suffering they incur as an occupant of a taxi, or when they’re involved in a crash with a taxi cab.

Why require $1 million for Uber, but not for competitors?

Attorneys who help the people injured by taxis have seen how inadequate these policy limits are for decades.  But now, the true inadequacy of these insurance policy limits is underscored by what some politicians want to require of the new app-based, ride-sharing services – like Uber.

Recently, Rep. Tim Kelly (R-94th District (Saginaw, MI)) introduced House Bill 4032 (the “Uber bill”), which proposes that app-based ride-sharing companies be required to :

“[M]aintain[]” a “primary insurance policy” with $1 million in liability protection “covering each … driver” when he or she is transporting a passenger or rider.

Don’t get me wrong. I fully support Rep. Kelly’s bill and I’m all for the $1 million minimum liability limits he’s proposing. I just think it should be applied to taxi services and cabs and other transportation services, too.

If the liability insurance limits are going to be set at $1 million for app-based, ride-sharing services like Uber (presumably to better protect people who are injured in a car accident caused or while being transported in a Uber car), then shouldn’t the same logic apply to taxis?  Shouldn’t the $1 million liability bodily injury limits be applied across the board to all taxi companies, like Checker Cab and Michigan Green Cabs, and all the others?

Taxi liability limits v. limousines liability Limits – It’s getting uber confusing

Strange as it may sound – especially given the exposure they have and how many crashes they cause – the  minimum liability limits for taxis or taxicabs under Michigan law are the same $20,000 minimum limits as those for regular, non-commercial cars or passenger vehicles:

  • “$20,000.00 because of bodily injury to or death of 1 person in any 1 accident”;
  • “$40,000.00 because of bodily injury to or death of 2 or more persons in any 1 accident”;
  • “$10,000.00 because of injury to or destruction of property of others in any accident.” (See MCL 500.3101(1); 500.3131; and 500.3009(1))

But what about limousines?  If taxis are required to carry $20,000 in liability coverage, what are limos required to carry?

Well, the Michigan Limousine Transportation Act (LTA) requires: “limousines with a seating capacity of 1 to 9 passengers including the driver” to carry “bodily injury and property damage liability insurance with a minimum combined single limit of $1,000,000.00 for all persons injured or for property damage.” (See MCL 257.1913(2)(a))

But that requirement doesn’t apply to taxis. Taxis are strangely exempt from the LTA’s insurance requirements:

“This act shall not apply to [a driver for-hire] who is only providing transportation using metered vehicles identified as a taxi or taxicab with a maximum seating capacity of 3 to 9 passengers or less, including the driver.”

Related information:

HB 5854: Uber riders to have same rights as taxi riders

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