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Injured Rideshare Drivers: Who Is Responsible?

Monday, June 22, 2020

Injured Rideshare Drivers: Who Is Responsible?

Americans are increasingly relying on drivers for rideshare companies like Uber or Lyft to get them to their destination. While these drivers serve an important function, they also put themselves at high risk of injury. In 2018, there were over 3,000 fatalities due to motor vehicle crashes in California.

The results of a rideshare accident can be devastating to the driver. Injuries will mean lost wages, and damage to a vehicle could take away their only means of providing support for themselves or family. Rideshare drivers need to understand their rights for recovery if they are injured while driving for a company like Uber or Lyft.

Determining Fault

When there is a car accident, a party is considered at fault if they acted negligently in a way that caused injury to another person or property. Common actions that can lead to a finding of fault include any violation of a traffic ordinance, such as speeding or running a red light. If a driver received a traffic citation from the police, this is compelling evidence that they acted negligently.

Insurance companies will also use fault as a basis for determining which driver's insurance should pay any claims. In order to limit coverage obligations, insurance companies are strongly incentivized to demonstrate that their insured was not at fault.

To make sure you can establish a strong case against the other party, be sure to secure a police report, document the scene of the accident, and secure contact information for any witnesses.

Seeking Recovery

Rideshare drivers face a complicated web or responsibility when determining how to recover for their injuries after an accident. While the driver might feel that they are employed by Uber or Lyft, they will considered an independent contractor.

Independent Contractors

Whether an individual is an employee or an independent contractor is a determination made by analyzing the relationship between the individual and the company for which they are providing services. The following factors indicate that an individual is an independent contractor rather than an employee:

  • They control the work that is performed and how it is done;
  • They manage the business components of their job;
  • They do not receive any employee benefits; and
  • There is no formal employee contract

The National Labor Relations Board has advised that rideshare drivers are independent contractors. This finding excludes Uber and Lyft drivers from pursuing a workers' compensation claim. This finding, however, could be up for debate in California where recent legislation looks to limit the use of independent contractors in the state's gig economy.

Because an independent contractor cannot recover under workers' compensation, they will need to depend on insurance providers to compensate them for their injuries.

Navigating Insurance Policies

There are several insurance policies that might come into play after a rideshare accident:

  • The driver's personal policy;
  • The rideshare company's insurance policy; and
  • The policy of the other driver

Your first step should be to review the rideshare company's protocol when an accident occurs. Both Uber and Lyft require drivers to submit a report to access the company's insurance policies. The Uber crash report is here, and the Lyft crash report is here. If it is unclear whether you were operating in the course of your duties at the time of the accident, this will serve to complicate recovery even further and may require you to involve your personal insurance company.

If you are a rideshare driver who has been involved in an accident, you may be overwhelmed with the stress of managing injuries while considering the financial impacts. Navigating the complexities of determining fault and contacting insurance companies is an unnecessary additional stress.  Contact our firm today to understand the strength of your case and your options for recovery.

Money Management Tips for Uber and Lyft Drivers

Thursday, June 11, 2020

Individuals who chose to embark on a rideshare driver journey are becoming an increasingly important part of the workforce. Society is relying more and more on rideshare programs for doing things like making appointments, getting home safely after a wild night out, and for navigating a strange town.

In 2015 it was estimated that 14.6 million Americans were self-employed and that number is constantly increasing. The mantle of self-employment covers business owners, ride-share drivers, farmers, freelance writers, Etsy shop owners, and more.

 Self-employment as a rideshare driver isn't for the faint of heart. While many enjoy the freedom of being their own boss, most who consider themselves self-employed also admit that they face many challenges. For most, the biggest challenge is figuring out how to manage their money. 

 Why Money Management is so Difficult When You're a Rideshare Driver

The biggest financial headache you'll face as a member of the self-employed workforce is not knowing how much money you can expect to make from one week to the next. It doesn't matter if you own a restaurant, are part of a rideshare program, work as a freelance consultant, or are an author, it's difficult to calculate how much money you'll generate each time you sit down and work. Not knowing how much money you can count on coming in from one day to the next makes putting a budget together difficult.

The second biggest financial challenge you'll likely face during your self-employment as a rideshare driver is taxes, or more specifically, not being properly prepared when the government demands their share of your income.

The good news is that there are some self-employment money management tips that will help you weather the financial storm and keep your head above water while you enjoy all the perks of being your own boss.

 Rideshare Driver Money Management Tip #1-Don't Leap Into Self-Employment Without Creating a Savings 

If you're contemplating becoming a driver for Uber or Lyft, you want to do everything in your power to build up a decent amount of savings first. Carefully track your personal expenses for a month and determine how much money you need to have so you can survive approximately six months without any viable income. 

The good news is that you don't necessarily have to put off your self-employment as a rideshare driver dreams while you save money. While you're building your savings, start putting your self-employment plans into action. This gives you a worry-free time period to build your brand, gauge what your expected income will be once you're self-employed full time, and an opportunity to add even more money to your savings account.

Once you are ready to leave your day job and chase your self-employment and rideshare driver dreams, don't tap into the money you've saved. It's for emergencies only.  

Ride-Share Driver Money Management Tip #2-Keep Setting Aside Money for the IRS  

Don't assume that just because you're self-employed as a ride-share driver that the IRS won't want their share of your income. They do and it's a big share. The self-employed money management rule of thumb is that you should set aside 35% of everything you make for taxes. That doesn't mean you'll have to pay all 35% to the IRS, it's likely that your accountant will find deductions that lower the amount, but if you set aside 35% you'll be covered. Make sure you put the money you're saving for taxes in a separate account so you don't accidentally spend it.

Another IRS issue to keep in mind when you're self-employed as a rideshare driver is that you'll likely be expected to pay your taxes quarterly instead of all at once.

Ride-Share Driver Money Management Tip #3-Create a Budget and Stick to it 

Sit down every six months or so and create a budget, both for yourself and your rideshare driver business. The budget needs to include any expected big one time expenses, your household expenses, and routine expenses such as watercraft insurance. Make sure you create enough room in the budget for emergency expenses. Stick to the budget no matter what. If, at the end of the period, you have additional money left over because you earned more, add it to your emergency or retirement fund.

Ride-Share Driver Money Management Tip #4-Keep Setting Aside Money for the IRS '

Keep a record of your expenses, particularly your rideshare driver business expenses. Not only does this record allow you to stick to the budget you've created for yourself and see how your business is doing, but it will also come in handy if you're ever audited. In addition to keeping a written record, you should also keep all of your receipts handy.

These four money management tips for rideshare drivers  are just the tip of the money management iceberg. Other self-employed money management practices you should embrace include:

  • Actively reducing your debt load
  • Maximizing tax-deductions
  • Keeping business and personal expenses separate
  • Investing in your retirement

Smart money management is just one of the things you need to think about before becoming a rideshare driver. You also need to know all of your legal rights, which is why it's important to contact us for information about your relationship with the company you're driving for, how to handle clients, and every other legal issue that crops up while you're earning a living as a rideshare driver. We're the legal team that knows everything there is to know about th legal rights of rideshare drivers.

Resources: 

https://www.fool.com/the-ascent/banks/articles/4-financial-challenges-being-self-employed-how-overcome-them/

https://money.usnews.com/money/personal-finance/articles/2015/04/17/5-ways-to-avoid-raiding-your-emergency-fund


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