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Back to Basics with Lyft, UberX, Uber: A Brief Guide To Each Service

Bovo Law Feb. 18, 2014

Back to Basics with Lyft, UberX, and Uber: A Brief Guide To Each Service

A while back I wrote a few blog posts on why I think Lyft is a terrible idea.

I promised you I would keep an eye out for updates on these services. And I never break a promise.

The Colorado Senate Business, Labor, and Technology committee approved Senate Bill 125, which would regulate “Transportation Network Companies” (TNCs) under the Public Utilities Commission. TNCs that would be regulated include Lyft and UberX.

There are quite a few people out there who still are unclear as to what a TNC is, and the differences between Lyft, UberX, and Uber. Allow me to explain, so we can tackle some bigger questions later this week.

A “Transportation Network Company” (TNC) is basically a ride sharing company. They have developed an app for your smartphone that connects private citizen drivers and public passengers.

Lyft and UberX operate much in the same way, a private driver with his or her own car and private insurance applies to become a driver. Upon passing a pretty cursory application process, that driver then becomes connected to public passengers needing rides that have downloaded the respective apps and creating an account. A ready passenger logs into the app, and requests a ride. A nearby driver then picks, them up, takes them to their destination, and upon completion of the ride, the passenger pays the driver via the app. No money is exchanged in the actual ride.

Uber operates in the exact same way except for one very important difference: Uber drivers are commercial drivers who carry commercial insurance.

Lyft and UberX drivers operate with their own private auto insurance policies that do not cover any type of livery or TNC driving. If an accident occurs, the policy will not cover any damages or medical bills of any parties involved. Uber drivers, on the other hand, operate with a commercial policy, so any damages or physical injuries as the result of an auto accident with an Uber car are typically covered.

Senate Bill 125 addresses only Lyft and UberX, not Uber. The Bill is currently headed to the Appropriations Committee. More on SB 125 to come later this week.