Taxi Versus Lyft, Part One: On Accountability and The Insurance Question

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[Part One of a preliminary discussion between Driver 8, a former taxi driver turned Lyft driver, and Kelly Dessaint, former Lyft driver turned taxi driver, moderated by Lauren Smiley in November 2015, before the Lyft vs. Taxi Thunderdome live debate on Backchannel. Read the backstory here.]

ON ACCOUNTABILITY 

Driver 8, you were telling me that now that you’re a Lyft driver, you find the cab industry a hard one to defend , that  it didn’t really serve the customer… Can you explain?

Driver 8: First, a taxi company’s’ revenue is generated by leasing taxis to drivers. So there is no distinction between a “good” and a “bad” taxi driver, as long as they continue to pay their lease, or gate fee. Passenger satisfaction has zero impact on the bottom line under this model, so there’s no impetus to discipline, to remove “bad” drivers, nor to be concerned with providing a “service” at all. In a commoditized market like taxis, which have little difference between brands, are closed to competition, and under-supplied (as it was in San Francisco), the need for customer retention is non-existent. Had customers been adequately served by this system, there would have been no demand for the rideshares to exploit.

Kelly: When I first started driving for Lyft in February of 2014, the number one thing my passengers told me was how grateful they were to have the Lyft and Uber option because they hated the service they received from cab companies. Everything from stinky, dirty cars, to cabs not showing up when they called and drivers refusing to take passengers to certain parts of town.

When I switched to taxi and saw how rickety the cabs were, how grimy some of the drivers were and how so many drivers didn’t seem to care what their passengers thought of them, I understood clearly why the rise of Uber and Lyft happened so quickly. That said, I know plenty of cab drivers who do take great pride in their work and their vehicles. In an ideal world, there would be someone at the gate who inspects each cab and each driver before they go out and makes sure all credit card machines are in working order. But, as Driver 8 points out, the cab companies have no incentive to properly manage drivers because they operate essentially like a car rental company.

Lauren: You guys were discussing the power dynamics between the driver and passenger in cabs vs. rideshares. Cab drivers reserve the right to say, “Get out.” Ride-hail drivers have to appease riders to keep their rating up. So should industries be more worried about serving their customers or their workers?

Kelly: Uber and Lyft drivers live and die by the rating system. So if they don’t make the passengers happy, they get lower ratings, which can lead to deactivation. Unfortunately, it’s not always easy to make people happy. Especially late night drunks. They can be very demanding and may or may not be in their right mind when leaving a rating. And yeah, if you tell an Uber passenger to get out, they are going to one-star you. But with cab driving, you never have to worry about appeasing passengers – all you’re risking is a good tip.

Driver 8: Kelly made my point for me pretty clearly – there’s an inherent lack of accountability and disregard for serving the passenger in the taxi model. Since local taxi fleets have recently adopted an app called Flywheel – which works much like Lyft, and which similarly relies upon passenger ratings – couldn’t the same argument about the burden of passenger ratings also be made? If one proves incapable of providing adequate service at least mostof the time, should they be allowed to continue driving unabated?

My real concern with the rating system (and corresponding threat of deactivation) is the lack of transparency and the absence of an immediate appeal process. The post-ride anonymity of the passenger rating system smacks of passive-aggressiveness, and being denied the ability to face one’s accuser, or to at least quickly respond with exonerating evidence, is fascist.

I’ve experienced this once, and it was alarming, disconcerting, and incredibly frustrating. Your app suddenly locks you out – perhaps while you’re out driving – and you get a message saying, “Your account has been deactivated.” That’s it. You contact support via email – there is no 800-number – and you get an email in reply, saying that you’ll be “hearing from them soon.” There’s no indication of why, of what you’ve been accused of doing, or by whom. There’s no way for you to defend yourself because, you know, defend yourself against what? “What’s been alleged?” “What did I do?” For a driver, depending on this income to pay the rent, or to feed her kids, it’s a nightmare. Imagine if your income has suddenly been shut off, you don’t know why, and there’s nothing you can do about it. To make matters worse, you don’t know how long it will be before they contact you – and the reality is that it might be a week before you hear from them.

My experience was with Lyft. (And don’t even think about going to their office – no one will talk to you – it’s like they’ve received training in driver shunning tactics). I’ve never had to face this with Uber, thankfully. But, I’ve been told, and can only imagine, that it’s even more brutal, faceless, and that you may not even get the opportunity to appeal – that you’re done, and that’s that. However, at least Uber has an office for drivers to go to, and provides them with the ability to speak with someone in person.

Kelly: Look at what happened to Eric Barajas, who was on the Next:Economy panel with us. After speaking out at the conference and questioning David Plouffe, he was unable to receive ride requests for two days. It wasn’t until a reporter from The Examiner contacted them that Uber reinstated his account. They gave a bunch of lame excuses about why it happened, though none held water. They have too much power. More than the taxi companies ever had. Because while you can bring a taxi dispatcher a plate of homemade cookies and get special treatment, or at least be more than just a name on a schedule, with Uber and Lyft, you will always – ALWAYS – just be a number in their system they can chose to activate or deactivate regardless of what may or may not have happened.

Driver 8: Ratings aside, while the taxi model overtly favors the driver, Uber appears to assign the preponderance of value to the passenger. Neither of these extremes are sustainable. (At least, not until self-driving cars completely eliminate the need for drivers). Until then, a balance needs to be struck in which both parties, drivers and passengers alike, are valued and treated as customers. Then you don’t have to choose between a high driver turnover rate, or a high passenger churn rate.

Kelly: There was an article recently on how the Uber rating system makes passengers middle management, in that they are responsible for supervising the workers by rating their performance after each ride. I really don’t like the idea of drunks and pissed off people judging my work. No matter how high my rating was, it was still disheartening to see it go down a fraction because someone didn’t like me for whatever reason. 99.9% of my rides were seamless. I was consistently a high-rated driver and left with a 4.95 on Uber and 4.94 on Lyft. Still, it’s natural to have an emotional response to being criticized and judged. I loathe the rating system and find it absolutely unnecessary: nowadays, people take to Twitter and Facebook to voice their complaints about any and all services they experience. It seems a better system would be to just allow the passenger to inform the company if the service is subpar. The five star system is demeaning.

And yeah, Flywheel has ratings as well, but very few leave ratings. I have only gotten 48 ratings out of approximately 250 fares. And if they did, think about how easily they could blame the driver for a cab with a ragged back seat or a clunky car that he/she has no responsibility over. When you’re a gate and gas driver, you’re stuck with whatever vehicle they give you. I prefer my work performance not be judged by who may or may not be qualified to make proper distinctions.


 

blind-leading-themselves-with-phone

THE INSURANCE QUESTION

Lauren: Could either of you tell me about what rideshare drivers do after accidents, as far as handling the insurance?

Kelly: Uber charges a $1,000 deductible and Lyft charges a whopping $2,500 deductible. Drivers on Facebook forums almost exclusively recommend not telling anyone you were driving for Lyft or Uber at the time of the accident. You take the “trade dress,” the Lyft and Uber signage down, and try to go through your personal insurance. This is what both companies tell drivers to do. Only if the claim is rejected by their personal insurance do they go to James River Insurance Company, which, I believe, both Uber and Lyft use.

Driver 8: Kelly’s contentions mainly apply to rideshare drivers who are driving without policies designed and/or approved for transportation network company drivers [the legal designation for rideshare companies] driving, and is somewhat out of date. The passage of CA AB2293 required Lyft and Uber to uniformly improve their liability coverage, and to expand coverage to the time the driver first opens their app. From Uber’s website: “Under the new California law, automobile insurance that rideshare driver partners currently maintain under their personal policies will no longer apply while a driver is logged in to a TNC app, unless the driver has purchased insurance that covers ridesharing.” However, Companies such as Farmers Insurance, Esurance (Allstate), and Metromile, already offer policies specifically designed for Lyft and Uber drivers wanting additional coverages beyond what is provided by their TNC’s policy.

The ONLY reasons a driver would want to hide his or her trade dress would be in the event that they were knowingly committing insurance fraud, either by deceit, or omission, or if they were attempting to hide an at-fault accident from Lyft or Uber, in an attempt to avoid deactivation. Otherwise, making an unnecessary claim on one’s personal insurance policy would be costly, and would make no sense.

To specifically answer the question, of what drivers are instructed to do in the event of an accident (from Lyft):

If you experience an accident, or an issue which threatens your personal safety, make sure to take the appropriate steps to protect yourself and get to a safe place. If necessary, call the authorities by dialing 911 or your local non-emergency assistance line, and then call our Critical Response Line. We’re available 24 hours a day, 7 days a week. Check for injuries.  If possible, move cars to a safe place, away from traffic. Record the other driver’s license plate number, make, and model. Exchange information with the other driver (license, phone number, insurance policy number and carrier) *Both Lyft and Uber’s insurance policies may be accessed through their respective app. Find any witnesses, and ask for their names and numbers. Take pictures of the scene and any damage. Call the necessary authorities – they’ll know whether it’s appropriate to send help. Notify Lyft. For minor accidents, please alert us via email. Our dedicated hotline is here for emergencies.

Kelly: It’s a totally different situation for drivers with policies that cover Uber/Lyft driving. However, most drivers do not carry commercial insurance. Uber and Lyft like to boast how many part time drivers are on the platforms. I’ve read numerous posts on Facebook where drivers have counseled other drivers to lie about driving for Uber/Lyft when in an accident to avoid the hassle of dealing with James River (I collected this information for a reporter), being deactivated and/or paying the deductibles (which are criminal, in my opinion seeing as how the deductible on my personal policy is only $500). I’ve talked to numerous drivers who have been in accidents and had horrible experiences and gofundme.com is filled with drivers looking to crowdsource their deductibles or pay for repairs that occurred with driving for Uber/Lyft… I have talked to cab drivers who’ve witness accidents with Uber/Lyfts and seen the drivers remove the placard. I witnessed an accident on Oak and Stanyan where the Uber driver tried to lie about being one, even though a passenger emerged from the back seat! And I personally know an Uber driver who hit a Lyft car and totaled both. When I asked how it was going dealing with Uber’s insurance, he said, “What are you talking about? I went through my own insurance. They cut me a check last week.”

In a cab – based on my personal insurance at least and what I’ve seen in the 10 months of cab driving  –  when you get in an accident, you call dispatch, deal with the situation and fill out some paperwork. In my third week of cab driving, a driver knocked my side mirror off and drove away. Yeah, I had to go to the police station, fill out paperwork, take the cab back to the yard and fill out some paperwork. But when I was finished, the dispatcher asked if I wanted a spare to go back out and work. How long will an Uber/Lyft driver be out of work when they get in an accident?

While Driver 8 may be doing the right thing by having a policy that covers his activities, most do not and are committing insurance fraud. And carrying adequate insurance also cuts into profits, something Eric Barajas, who was on the panel with us, pointed out.

Driver 8: Again, some TNC drivers may make irresponsible decisions, such as committing insurance fraud in order to save money. No one is saying this is a good idea. If, claiming an accident on your own insurance, and paying the rate increase you’ll face, makes more sense than paying the deductible on Uber, or Lyft’s policy, then have at it. (Of course, this really only applies to accidents in which the Uber/Lyft driver is at fault anyway). As to downtime, at least two companies that I know of, Hertz and Peers, offer cars pre-approved by Uber/Lyft, for temporary use if your personal car is made unavailable due to damage and/or repairs. (The Peers plan works like insurance, and costs $20.00 a month –  less than one ride to SFO).

Kelly: Even if the driver is not at fault, if they go through Uber’s or Lyft’s insurance, they have to pay the deductible. Again, $1,000 and $2,500 respectively. That’s insane! If I’d had an accident while doing Lyft and had to pay that much money to get my car back, I would have been screwed. Drivers are barely making enough money as it is.

Driver 8: If someone else wrecks your car, their insurance covers it, not Uber’s, and you get 100% reimbursement. Deductibles only apply to claims against your (or Uber’s) insurance policy.

Kelly: Not if the other driver sees that placard and tells their insurance company I was a TNC driver. There’s no way the insurance company would cover the claim under those circumstances. How odd that you are somehow aggrandizing insurance companies, that are only out to make money, and the only way to make money is to NOT settle claims. They’re looking for any excuse to not pay out claims, and a driver committing insurance fraud would be an ideal reason to reject the claim. I’m from Los Angeles. I drove a car there for 10 years and had been in several accidents. And I’ve known dozens and dozens of people who have been in accidents. Insurance companies are not to be trusted.

Driver 8: On the subject of accidents, taxi supporters often speak as though they have a corner on the safety market. But, for every Uber horror story, I can point to an equally tragic or horrific taxi story, like here, here, here, and here. I just think it’s pretty obvious that the media just loves to pile on the rideshares, even when the story is of absolutely no consequence, such as here.

Kelly: This argument is flaccid at best. Taxis have been around longer than Uber and Lyft, so the number of accidents would be relative to the timeframes. When Uber and Lyft started, there weren’t as many cars on the road (like back in 2012, which two of the links you provided are from). Now, we’re seeing an increase in the numbers of TNCs on the road rise to five times the number of cabs in San Francisco, and as a consequence, we are seeing WAY more incidents with TNCs than taxis. And we’ll continue to see more as inexperienced drivers, unfamiliar with the city streets, flock into San Francisco on Friday and Saturday nights to make the “big bucks.” There are accidents almost weekly with TNCs that go unreported. I’d be happy to present plenty of evidence to back up that claim. Remember, the cab drivers on that beloved FB group just love to document Uber and Lyft drivers messing up.


 

Part One | Part Two | Part Three | Part Four | Part Five

[Illustrations by David Foldvari]

4 thoughts on “Taxi Versus Lyft, Part One: On Accountability and The Insurance Question

  1. Pingback: Taxi Versus Lyft, Part Five: From One Evil to Another | I Drive S.F.

  2. Pingback: Taxi Versus Lyft, Part Four: A Nutcase and a Traitor | I Drive S.F.

  3. Pingback: Taxi Versus Lyft, Part Three: Transportation as a Public Service | I Drive S.F.

  4. Pingback: Taxi Versus Lyft, Part Two: Accidental Casualties and The Illusion of Safety | I Drive S.F.

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