Hey Lyft Drivers! Do You Know You’re Not Allowed to “Profit” by Driving Like a Taxi? Why Lyft Thinks It’s Legal

Here you go, just match up the Lyft Company’s “Terms” for its drivers with the recently passed California Insurance Code Section 11580.24.

The legislation Lyft reps refer to isn’t legislation at all – it’s a law that’s in effect now.

So, just as a massage parlor only takes a cut for massage service and is “unaware” of its sex workers profiting from sex, Lyft takes a cut (20% currently, but look for that to rise soon) for app service and is “unaware” of its drivers profiting from driving around like a taxi.

So, how much can people earn in a year with Lyft and still not “profit?” $10k? $30k? It depends. It depends on the car and how far people want to push things.

Anyway, read the bold. Enjoy.

By using the Service, a Driver represents, warrants and agrees that:

  • Such Driver is at least 23 years of age.
  • Such Driver possesses a valid driver’s license and is authorized to operate a motor vehicle and has all appropriate licenses, approvals and authority to provide transportation to third parties in all jurisdictions in which such Driver uses the Services.
  • Such Driver owns, or has the legal right to operate, the vehicle such Driver uses when accepting Riders, and such vehicle is in good operating condition and meets the industry safety standards and all applicable statutory and state department of motor vehicle requirements for a vehicle of its kind.
  • Such Driver has a valid policy of liability insurance (in coverage amounts consistent with all applicable legal requirements) for the operation of such Driver’s vehicle to cover any anticipated losses related to such Driver’s provision of rides to Riders.
  • Such Driver will be solely responsible for any and all liability which results from or is alleged as a result of the operation of the vehicle such Driver uses to transport Riders, including, but not limited to personal injuries, death and property damages.
  • In the event of a motor vehicle accident such Driver will be solely responsible for compliance with any applicable statutory or department of motor vehicles requirements, and for all necessary contacts with such Driver’s insurance carrier.
  • Such Driver will obey all local laws related to the matters set forth herein, and will be solely responsible for any violations of such local laws.
  • Such Driver will not make any misrepresentation regarding Lyft, the Lyft Platform, the Services or such Driver’s status as a Driver, offer or provide transportation service for profit, as a public carrier or taxi service, charge for rides or otherwise seek non-voluntary compensation from Riders, or engage in any other activity in a manner that is inconsistent with such Driver’s obligations under this Agreement.

California Insurance Code Section 11580.24 (from 2010):

(a) No private passenger motor vehicle insured by its owner pursuant to a policy of insurance subject to Section 11580.1 or 11580.2 shall be classified as a commercial vehicle, for-hire vehicle, permissive use vehicle, or livery solely because its owner allows it to be used for personal vehicle sharing as long as all of the following circumstances apply:

(1) The personal vehicle sharing is conducted pursuant to a personal vehicle sharing program.

(2) The annual revenue received by the vehicle’s owner which was generated by the personal vehicle sharing of the vehicle does not exceed the annual expenses of owning and operating the vehicle, including depreciation, interest, lease payments, auto loan payments, insurance, maintenance, parking, fuel, cleaning, automobile repair, and costs associated with personal vehicle sharing, including, but not limited to, the installation, operation, and maintenance of computer hardware and software, signage identifying the vehicle as a personal sharing vehicle, and any fees charged by a personal vehicle sharing program.

(3) The owner of the private passenger motor vehicle does not knowingly place the vehicle into commercial use, as defined by Section 675.5, by a personal vehicle sharing user while engaged in personal vehicle sharing.

(b) For purposes of this section the following definitions apply:

(1) “Personal vehicle sharing” means the use of private passenger motor vehicles by persons other than the vehicle’s owner, in connection with a personal vehicle sharing program.

(2) “Personal vehicle sharing program” means a legal entity qualified to do business in the State of California engaged in the business of facilitating the sharing of private passenger vehicles for noncommercial use by individuals within the state.

(3) “Private passenger motor vehicle” means a vehicle that is insured, or is subject to being insured, under a personal automobile liability insurance policy insuring a single individual or individuals residing in the same household, as the named insured, or meets the requirements of Section 16058 of the Vehicle Code, but does not include a vehicle with fewer than four wheels.

(c) A personal vehicle sharing program shall, for each vehicle that it facilitates the use of, do all of the following:

(1) During all times that the vehicle is engaged in personal vehicle sharing, provide insurance coverages for the vehicle and operator of the vehicle that are equal to or greater than the insurance coverages maintained by the vehicle owner and reported to the personal vehicle sharing program. However, the personal vehicle sharing program shall not provide liability coverage less than three times the minimum insurance requirements for private passenger vehicles. Compliance with the terms and conditions of this paragraph shall be deemed to avoid the application of the limitation on damage recoveries set forth in Section 3333.4 of the Civil Code.

(2) Provide the registered owner of the vehicle with a Department of Motor Vehicles Form REG 5085 or other suitable proof of compliance with the insurance requirements of this section and the requirements of the California Financial Responsibility Law in Section 1656.2 of the Vehicle Code, a copy of which shall be maintained in the vehicle by the vehicle’s registered owner during any time when the vehicle is operated by any person other than the vehicle’s owner pursuant to a personal vehicle sharing program.

(3) Collect, maintain, and make available to the vehicle’s owner, the vehicle owner’s primary automobile liability insurer on file with the Department of Motor Vehicles, and to any other government agency as required by law, at the cost of the personal vehicle sharing program, verifiable electronic records that identify the date, time, initial and final locations of the vehicle, and miles driven when the vehicle is under the control of a person other than the vehicle’s owner pursuant to a personal vehicle sharing program.

(4) Provide the vehicle’s owner and any person that operates the vehicle pursuant to a personal vehicle sharing program with a disclosure that contains information explaining the terms and conditions contained in this section.

(5) Not knowingly permit the vehicle to be operated for commercial use by a personal vehicle sharing user while engaged in personal vehicle sharing.

(6) Use only private passenger vehicles.

(7) Facilitate the installation, operation, and maintenance of computer hardware and software and signage, necessary for a vehicle to be used in a personal vehicle sharing program, including payment of the cost of damage or theft of that equipment and any damage caused to the vehicle by the installation, operation, and maintenance of that equipment.

(d) Notwithstanding any other provision of law or any provision in a private passenger motor vehicle owner’s automobile insurance policy, in the event of a loss or injury that occurs during any time period when the vehicle is under the operation and control of a person, other than the vehicle owner, pursuant to a personal vehicle sharing program, or otherwise under the control of a personal vehicle sharing program, the personal vehicle sharing program shall assume all liability of the owner and shall be considered the owner of the vehicle for all purposes. Nothing in this section limits the liability of the personal vehicle sharing program for its acts or omissions that result in injury to any persons as a result of the use or operation of a personal vehicle sharing program.

(e) A personal vehicle sharing program shall continue to be liable pursuant to subdivision (d) until both of the following occur:

(1) The private passenger motor vehicle is returned to a location designated by the personal vehicle sharing program.

(2) The earliest of one of the following occurs:

(A) The expiration of the time period established for the particular use of the vehicle.

(B) The intent to terminate the personal vehicle sharing use is verifiably communicated to the personal vehicle sharing program.

(C) The vehicle’s owner takes possession and control of the vehicle.

(f) The personal vehicle sharing program shall assume liability for a claim in which a dispute exists as to who was in control of the vehicle when the loss occurred giving rise to the claim, and the vehicle’s private passenger motor vehicle insurer shall indemnify the personal vehicle sharing program to the extent of its obligation under the applicable insurance policy, if it is determined that the vehicle’s owner was in control of the vehicle at the time of the loss.

(g) In the event that the owner of the vehicle is named as a defendant in a civil action, for a loss or injury that occurs during any time period when the vehicle is under the operation and control of a person, other than the vehicle’s owner, pursuant to a personal vehicle sharing program, or otherwise under the control of a personal vehicle sharing program, the personal vehicle sharing program shall have the duty to defend and indemnify the vehicle’s owner, subject to the provisions of subdivisions (d) and (f).

(h) Notwithstanding any other provision of law or any provision in a vehicle owner’s automobile liability insurance policy, while a private passenger motor vehicle is used by a person other than its owner pursuant to personal vehicle sharing facilitated through a personal vehicle sharing program, all of the following shall apply:

(1) The insurer of that vehicle on file with the Department of Motor Vehicles may exclude any and all coverage afforded pursuant to its policy.

(2) The primary and excess insurer or insurers of the owners, operators, and maintainers of the private passenger motor vehicle used in a personal vehicle sharing program shall have the right to notify an insured that it has no duty to defend or indemnify any person or organization for liability for any loss that occurs during use of the vehicle in a personal vehicle sharing program.

(i) No policy of insurance that is subject to Section 11580.1 or 11580.2 shall be canceled, voided, terminated, rescinded, or nonrenewed solely on the basis that the private passenger motor vehicle has been made available for personal vehicle sharing pursuant to a personal vehicle sharing program that is in compliance with the provisions of this section.

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13 Responses to “Hey Lyft Drivers! Do You Know You’re Not Allowed to “Profit” by Driving Like a Taxi? Why Lyft Thinks It’s Legal”

  1. pchazzz says:

    What is your problem with Lyft? This city doesn’ thave enough cabs as it is because of the stranglehold the medallion holders have over the process. Leave Lyft alone!

  2. sfcitizen says:

    Just getting started with Lyft. Trying to get some DOI stateworkers on the record.
    Lyft is illegal. Lyft thinks it’s being clever but it’s not.
    Lyft wouldn’t like you equating Lyft with taxis. That’s kind of the reason why UberCab changed its name to Uber.
    You want to get rid of medallions, that’s fine with me. Do you want to get rid of the minimum wage of $10 something per hour? Do you want to get rid of the prevailing wage of $70-something for laborers on some govt. projects? OK fine.

  3. El Señor says:

    You are The reason this country is a litigious mess. Cabs suck and they are horrible drivers. Lyft is better and it pisses you off because you know it.

  4. sfcitizen says:

    Well I think this country would be litigious with or without me. Lyft is cheaper, sure.

  5. Brendan says:

    Sorry dude, but you should re-write your post, cause you misinterpreted the legislation. For Example,
    “its owner allows it to be used for personal vehicle sharing as long as all of the following circumstances apply”
    This doesn’t apply to lift because this isn’t vehicle sharing. Vehicle sharing is like companies Getaround or peer-to-peer car sharing.

    Basically, Lyft is saying you can’t knowingly charge people. You can’t ask for money. Remember, this is donation based, You could take a 30 min ride for 50 cents if you want.

    So yeah, your whole blog post or whatever doesn’t even make any sense, sorry. lol.

  6. Robert Lemek says:

    Typical liberal- and likely, fat ass- sitting at home complaining about people going out and making a living. Picking at every bit of legislation that was designed to REDUCE competition. Yet, every liberal thinks legislation is there to protect them.. HA- it’s there to protect special interests. I’ve lived here my entire life; San Francisco is full of “getting around the law” folks. All the day laborers that work for people without workers comp insurance or OSHA inspectors, bad scaffolding, lead paint, no oversight. Smoking in the back of bars. Driving in the carpool or bus lanes down market. Drinking in public. All illegal. Yes. But.. who cares? Lets be free and live. Get out and produce values, innovations, inventions, businesses, commerce, trade and prosperity for yourself and this world. Stop complaining. You’re not going to become a famous blog writer.

  7. sfcitizen says:

    yes you could get a ride for 50 cents. then you would not be a customer of lyft anymore.

    The fare is not actually donation-based, it’s based on what a taxi would charge…

  8. sfcitizen says:

    too late, already am

  9. Dan says:

    Nothing is going to hide the fact that Lyft is a fundamentally stupid idea. So I’m gonna hop in an unlicensed, unregulated car with a driver who’s only been subject to the flimsiest of background checks… all to save maybe 10-20%?

    Cabs suck in just about every city out there, but there’s a clearly defined system in place to make sure it doesn’t suck too much. Lyft doesn’t even have that. Some crappy little review system? Yeah, that’s not gameable. Just look at Yelp.

    Idiot idea that will be dead within a year.

  10. Professional Driver says:

    The saddest thing about Lyft, Sidecar, and other “evolved” non-professional rideshare services is that the extent of the hoodwink and drinking of the tech-industry kool-aide will likely only be dispelled when someone is killed in an accident and the publicity generated from that sheds light on the fact that the “insurance” held by Lyft is nothing short of a sham — if it is in fact one million dollars (and not just a million in the pocket of the PUC) it’s at most a million dollars in total, that’s it for covering everyone, NOT a million dollars PER passenger like you have in a cab. There have already been some serious accidents, just without fatalities: a motorcyclist slammed into on Lombard when the Lyft driver ran a red, a bicyclist hit in the mission. Accidents happen. It’s only a matter of time.

    If you want to order a professional, fully insured and protected ride via your smartphone, try the Flywheel app. There’s even a coupon going around for 10 bucks off your fare: the code for that is NHH29J (can be used once per person).

    At least until the owners of these app-based rideshare services fess up and pay for the full professional driving coverage that the public deserves, you’re risking life and limb, literally, if you hail a ride in one of these “rebel” services. The truth is, they don’t want to pay for it, and you ride at your own risk. It’s in the usage agreement. Look into it. Don’t believe the hype.

  11. New driver says:

    I don’t know about making any “profit” when it comes to Lyft. I tried being a Lyft driver recently. I worked 8 hours and earned $200 which is $25/hr. I drive a larger luxury vehicle ($62k) that doesn’t get better than 15 mpg with the constant stop and go driving of picking up passengers. So after filling up my tank $80 I’m left with $120, again about $15/hr. Then if I consider that I drove close to 300 miles that night and figuring the national rate for milage at .35, totaling $105 in wear and tear/deprecation/etc. I’m now down to $15 for the night in “profit” or $1.88/ hr…. In summary… I like the idea of Lyft, but I don’t know that it is right for me without making a descent wage.

  12. New driver says:

    $1,000,000 excess liability insurance: The Lyft platform provides drivers with excess liability insurance up to $1,000,000 per occurrence. repeat… per occurrence.

  13. Arthur says:

    1: The PUC ruled that Lyft is a Chartered Car Service.

    2: Lyft cannot pick up people “hailing” them from the side of the road. Only Taxis can do that. Lyft is not the same as a Taxi, it is a Chartered car service.

    3: As Lyft is superior to Taxis in both price, and service. Taxis are going to DIE A HORRIBLE SLOW PAINFUL DEATH, AND NOBODY WILL MISS THEM!

    Cheers.

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