ARTICLE: Quandary on Whether Limited Tort or Full Tort Applies to Uber Drivers

The below article of mine was published in the July 2, 2019 edition of the Pennsylvania Law Weekly and is republished here with permission:

Quandary on Whether Limited Tort or Full Tort Applies to Uber Drivers

By Daniel E. Cummins | June 27, 2019

Pennsylvania Law Weekly

As the use of Uber and Lyft rideshares become more prevalent in Pennsylvania, it is more likely that motor vehicle accidents involving such drivers will increase and thereby give rise to novel issues of law.

One such issue is whether an Uber or Lyft driver who has elected the limited tort option under his own personal automobile insurance policy will be deemed to be a full tort plaintiff if he is involved in an accident while driving as an Uber or Lyft driver. The quandary in this regard is whether the Uber or Lyft driver’s use of his own personal vehicle for business purposes triggers an exception to the limited tort option.

Limited Tort

Under the tort option statute found at 75 Pa.C.S.A. Section 1705, carriers are required to secure from their customers a written election of either full tort coverage or limited tort coverage whenever a personal automobile insurance policy is sold.

Full tort coverage, sold at a higher premium, allows an insured to pursue a claim for noneconomic damages, otherwise known as pain and suffering damages, without regard for the types of injury sustained by the plaintiff.

On the other hand, with limited tort coverage, an insured will pay a lower premium but, in exchange, agrees that he cannot recover pain and suffering damages unless and until the injured insured shows that he has sustained a serious injury as a result of the accident. A serious injury in this context is a injury that results in a substantial impairment of a body function, serious permanent disfigurement or death.

The grey area for Uber and Lyft drivers is this—where person has chosen the limited tort alternative, there is an exception to the rule where that driver is operating a commercial vehicle as opposed to a “private passenger vehicle.” The question as to whether the use of a personal vehicle as an Uber or Lyft vehicle changes that private vehicle into a commercial vehicle has not been answered by the statutory law or the courts of Pennsylvania to date.

Status of Uber or Lyft Drivers

The legal issue of the tort option coverage applicable to Uber and Lyft drivers is complicated by the fact that such drivers use their personal vehicles in different capacities at different times. The lingo in the field is that Uber and Lyft drivers have different periods, or types, of driving statuses.

Period 1 is considered to be when the driver is driving their vehicle only in a personal capacity and without regard to the fact that they, at other times, are “on the app” and looking for fares to pick up as Uber or Lyft drivers.

Period 2 is when an Uber or Lyft driver is “on the app” and ready and willing to pick up a fare to drive somewhere but has not yet been summoned and when the driver has been summoned and is on the way to pick up the fare.

Period 3 is considered to be when the Uber or Lyft has a customer in the car as a passenger.

Statutes on Uber/Lyft Insurance

The statutory law pertaining to the mandatory requirements for insurance coverages for Uber and Lyft drivers can be found at both 66 Pa.C.S.A. Section 2601, et al., and 53 Pa.C.S.A. Section 57A01, et al., and is titled “Transportation Network Companies.”

The new law defines what a transportation network company is and identifies the relevant driver(s) included under the ambit of the statute. This new law also outlines a list of qualifications and standards that the company must meet before being permitted to operate in the commonwealth of Pennsylvania.

In addition, the law provides for the mandated minimums for liability insurance coverages and first-party benefits coverages depending on which scenario applies.

These scenarios include where the driver of the vehicle does not have passengers and is logged into the transportation network company network (presumably applying to the situation where the driver is on the way to pick up a fare), and where the driver of the vehicle does have passengers.

It is suggested that automobile accident litigators should review these statutes to become aware of these mandatory minimum liability coverages and first-party insurance coverages. These coverages were reviewed in a Nov. 16, 2017, Pennsylvania Law Weekly article titled “New Law: Mandated Coverages for Uber and Lyft Vehicles” by Daniel E. Cummins and Stephen T. Kopko.

According to Uber’s website, companies that are issuing these types of insurance policies include, at a minimum, James River Insurance Co., Progressive, Allstate and Farmers Insurance.

What the new law does not cover is the limited tort vs. full tort question for the separate insurance policies that are issued specifically for Uber and Lyft drivers over and above the personal automobile insurance such drivers may already have on their vehicles.

As such, there may be certain Uber and Lyft drivers who have elected the limited tort option under their personal automobile insurance policy and who have additional insurance Uber or Lyft-type policies for their commercial or business use of their vehicle that are silent on the tort option question.

A Requirement of Statutory Construction

Given that there is no statutory law or case law on point to answer the question presented, it appears that, if faced with the issue of whether an Uber or Lyft driver who has elected the limited tort option should nevertheless be considered a full tort plaintiff, the courts will have to engage in a construction of the statutes in place as compared to the insurance policies in question.

To the extent that a review of this question of law requires the court to interpret Pennsylvania’s Motor Vehicle Financial Responsibility Law, the courts can be guided by the Statutory Construction Act, 1 Pa.C.S. Sections 1501-1991.

Pursuant to the Statutory Construction Act, the object of all statutory construction is to ascertain and effectuate the General Assembly’s intention. When the words of a statute are clear and free from ambiguity, the letter of the statute is not to be disregarded under the pretext of pursuing its spirit.

Turning to the applicable statutes, under 75 Pa.C.S.A. Section 1705(d)(3), it is provided that “an individual otherwise bound by the limited tort election shall retain full tort rights if injured while an occupant of a motor vehicle other than a private passenger motor vehicle.”

Under 75 Pa.C.S.A. Section 1702, a ‘private passenger motor vehicle’ is defined as a “four-wheel motor vehicle, except recreational vehicles not intended for highway use, which is insured by a natural person and … is a passenger car neither used as a public or livery conveyance nor rented to others …”

Under these statutory provisions, it is likely that a court would rule that a car or truck used by an Uber or Lyft driver is obviously a “four-wheel motor vehicle” that is “insured by a natural person” by virtue of the driver’s personal automobile insurance coverage. See 75 Pa.C.S.A. Section 1702.

However, according to the same statutory language, the vehicle would fall out of the scope of the definition of a private passenger vehicle whenever that vehicle is “used as a public or livery conveyance.” A livery is otherwise known as a vehicle for hire.

Therefore, it would appear that, if faced with the issue, the courts could find that, although an Uber or Lyft driver had selected the limited tort option under their own personal policy, such a driver would nevertheless be deemed to be a full tort plaintiff if involved in an accident while the driver had a passenger in the car as a paying fare on a particular trip.

However, a wrinkle in this regard is that it could also be argued that, once the car is being used as a livery or a hired car, then that vehicle would fall within a business use exception under the personal automobile insurance policy such that that personal policy would not be applicable to the accident.

This would leave the plaintiff with only the Uber or Lyft liability policy in place under which no tort option election is apparently required. Such a plaintiff driver may then arguably have no tort option election in place and may, as a result, be found to be covered by the full tort option.

It also appears that, if a limited tort Uber or Lyft driver, was not “on the app” and was driving their vehicle solely for personal reasons, that driver would still be a limited tort plaintiff if involved in an accident on that particular trip.

Other grey areas in this regard involve those cases where the Uber or Lyft driver is driving around while “on the app” waiting for a fare to contact them for a ride as well as when the Uber or Lyft driver has received a message from a fare and is on the way to pick up that person for a ride. The courts may struggle with these scenarios in determining whether that Uber or Lyft driver should be deemed a limited tort or full tort plaintiff where that driver had previously elected the limited tort option.

In the end, it will surely be interesting to see how these novel areas of law pertaining to motor vehicle accidents involving Uber and Lyft drivers begin to play out in the courts across the commonwealth.

Daniel E. Cummins is a partner in the Scranton law firm of Foley, Comerford & Cummins where he focuses his practice in automobile accident litigation matters.

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