Uber and Lyft Launch Carpool Services (and a Lesson in Carpool Insurance)


Start your own carpool or catch a ride with strangers via Uber and Lyft? Either way, read up on the insurance issues first.

carpool lane
5 min read

Going my way? Lyft and Uber both announced this week that they are expanding their business models to include carpooling options. Lyft’s is called Lyft Line, and the company describes the new addition as an entirely new category of transportion: personal transit. “We believe that modern cities should offer reliable, affordable transportation wherever you live,” Lyft writes in a blog post announcing the launch of Lyft Line. “We want to bring the best parts of Lyft — on-demand service, door-to-door trips, and community — to daily travel.”

The idea is that the infrastructure built by riders requesting daily Lyft Line rides is ever-shifting according to the riding population’s needs. This video shows subway- or bus-like routes laid over an image of city streets, but then those lines disappear when they’re not needed. If nothing else, it’s smart marketing: Lyft is positioning Lyft Line a subway that could actually take you door to door.

Of course, a ride in a car with a few strangers is inherently different than large-scale public transportation, and that’s one reason some are skeptical. One sample New York Times comment from their story on the piece: “The very last thing I want to do in the morning on my way to work is talk to a stranger. Which is why I take the subway.”

Lyft swag.
Lyft swag.

Uber’s Answer

Uber’s take on the service, meanwhile, is called UberPool, and it’s nearly identical to Lyft Line: share a ride and split the cost with another rider who happens to be requesting a ride along a similar route. For Uber, the move is just one step closer to a country in which no one owns cars anymore. And that’s not exaggeration or this writer’s speculation—that’s Uber’s stated aim. From their blog post announcing the service: “Since the early days of Uber, we’ve been excited about the idea of providing transportation so inexpensive and reliable, people can actually sell their cars. Today, we’re announcing a bold experiment straight from the Uber Garage that we believe will be another important step toward that vision, and we’re calling it UberPool.”

We talked about the services around the office at The Zebra, and it lead to a larger conversation about the nature of carpooling: Will people want to be in such close quarters with total strangers? And just how popular is carpooling, anyway?

Turns out, carpooling basically peaked during the 1970s, as a result of the 1973 oil crisis. At that time, approximately 20 percent of commutes were carpools. Today, that figure hovers closer to 8 percent. Uber acknowledges the relative strangeness of hopping in a car with someone you don’t know directly: “This is also a bold social experiment,” Uber writes on their blog. “There’s the interaction between riders in an UberPool—should they talk to each other? When is that cool and when is it, well, annoying?”

UberPool in action.
UberPool in action.

Should you Start your own Carpool Instead?

So maybe you don’t want to share a car with strangers, but all this talk about carpools has you thinking of starting one for your office. Even if you’re just arranging an office carpool, you might have concerns about how that works with insurance—are you covered no matter whose car you’re driving? And what about other drivers in your car?

We asked The Zebra licensed insurance agent Jonathan Wagner this question, and he says that while many policies will cover other drivers, if they’re driving regularly, your insurance company will want them listed on your policy.

He adds, “One thing to think of when you are carting coworkers around would be your medical coverages. Personal Injury Protection coverage (PIP) is a great one to carry because it covers you and all other occupants of the vehicle, regardless of fault in an accident.”

If you're thinking of starting a carpool, call your insurance company to resolve any lingering concerns.

PIP doesn’t come particulary cheap, however. The Zebra licensed insurance agent Rick Vasquez did a little math on his own car insurance policy to put it in perspective: “In my case state minimum liability on my car would cost me $10.66 and PIP at $25,000 (which is the highest, and most commonly available limit for insurance companies) would be $8.67.” In other words, Vasquez explains, “PIP would cost me around 81 percent of what my liability costs!”

And one final thing to keep in mind: Some insurance companies may limit coverage of an accident if someone else (who is not named on your policy/with whom you do not live) was behind the wheel. “Permissive use is generally covered under the liability terms of an auto policy. As always, however, there are exceptions,” explains Gary Wickert in this Claims Journal piece. “There are certainly insurance carriers and policies that will not cover any driver not specifically named in the policy.”

Bottom line? If you’re thinking of starting a carpool, call your insurance company to resolve any lingering concerns. If you’re thinking of carpooling with Uber or Lyft, read our post on their insurance coverages first.

And by all means, don’t put a dummy in the passenger seat to sneak into the HOV lane. That’s just rude.