The problem this time involves passengers who hail a vehicle on the street and use cash to pay for the trip. According to a recent investigative news piece, cash trips occur daily for those who use the Uber platform.
This is a HUGE problem for Uber because passengers don’t understand that if they use cash they are entirely uncovered by Uber’s insurance. Pay cash and get in an accident and, well, you’ll need to fork over a lot more cash to pay those medical bills. And Uber’s response will be a quick “buh-bye” to both driver and passenger, and will move on to the next sucker.
Uber rides are only covered when the app is on and the driver has accepted a passenger request. But if the passenger negotiates on a street corner with a driver and pays cash, both driver and passenger are totally exposed in terms of insurance coverage.
Taxis have this thing called “primary commercial auto liability insurance coverage” 24 hours a day, 7 days a week. That means no matter the payment or dispatch method, each and every ride is covered by insurance all the time. Uber doesn’t want to pay for this more expensive type of insurance because it eats into profits for its Wall Street investors.