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Caught in a Pickle: The Dilemma of Uber Drivers' UM Coverage During Phase 2

In the dynamic world of ride-sharing, Uber drivers confront a significant challenge with the recent exclusion of Uninsured Motorist (UM) coverage during "Phase 2" — the interval between accepting a ride request and passenger pickup. This pivotal policy shift leaves drivers exposed to the hazards of uninsured motorists, akin to a "pickle," where a runner is caught between bases in a baseball game.

The Critical Gap in Coverage: Understanding Phase 2:

"Phase 2" in the ride-sharing context refers to the period when a driver has accepted a ride request and is on their way to pick up the passenger. Traditionally, this has been a period covered by ride-sharing company's insurance, including UM coverage. However, Uber has recently rejected this coverage raising significant concerns for drivers' protection against uninsured motorists during this vulnerable period. Uber, under policy number 01230478-2, has decided to reject UM Coverage for all its drivers in California, affecting them during Phase 2 – a time when they are vulnerable to accidents with uninsured motorists.

Legal Implications of Uber’s Policy Change:

Uber's take-it-or-leave-it rejection of Uninsured Motorist (UM) coverage for all drivers during the crucial Phase 2 may open itself to potential litigation on several fronts. Drivers, who find themselves unprotected against uninsured motorists after accepting a ride request and while en route to a passenger, could bring forth several claims against the ride-sharing giant on the following grounds:

  • Misrepresentation and Lack of Informed Consent: Drivers could contend that Uber did not provide a clear understanding of the insurance policy changes, thus failing to obtain their informed consent.

  • Breach of Contract and Good Faith and Fair Dealing: There may be grounds for breach of contract if drivers were led to believe their personal UM coverage would be sufficient during all phases of their service, a belief possibly fostered by the company's platform.

  • Negligence in Duty of Care: Uber’s potential failure to properly inform its drivers about the withdrawal of UM coverage during Phase 2 might be seen as a neglect of its duty to care for the drivers' well-being.

  • Contravention of Proposition 22: If Uber's actions are found to be in violation of Proposition 22's provisions, designed to protect gig workers in California, it could solidify drivers' legal claims.

  • Infringement of Consumer Protection Laws: Deceptive or unclear communication regarding the policy changes could lead to allegations of violating consumer protection statutes.

In light of these possible claims, Uber may need to reassess its approach to UM coverage to mitigate the risk of legal actions and to ensure the fair treatment and protection of its drivers.

The Legal Quandary of Adhesion Contracts:

When Uber altered its policy, drivers were presented with an option to accept or reject these changes. This situation epitomizes the problem with adhesion contracts, where there's a significant power imbalance, often leading to misunderstanding and potential legal challenges.

Proposition 22 and Independent Contractor Status:

The passage of Proposition 22 in California categorizes Uber drivers as independent contractors, not employees. This classification is seemingly inconsistent with Uber's unilateral decision to remove UM coverage for all drivers under its policy. Proposition 22, while classifying drivers as independent contractors, also mandates specific worker protections and benefits, such as minimum earnings guarantees, a healthcare stipend, occupational accident insurance, and vehicle insurance, including liability insurance. However, it does not specifically address or require UM coverage.

Given that independent contractors typically have more autonomy in selecting or rejecting specific coverages, Uber’s decision to unilaterally reject UM coverage, and requiring drivers to accept this to continue driving, raises questions about the fairness and true nature of their independent contractor status.

The Illusion of Coverage:

Many drivers might operate under the assumption that they are protected by UM coverage as part of their agreement with Uber. This misconception could lead to severe financial and legal consequences in the event of an accident with an uninsured motorist. The recent policy change by Uber, unfortunately, exacerbates this misunderstanding, potentially leaving drivers vulnerable.

Personal UM Policies and the Business Exclusion:

Adding to the complexity, most personal UM insurance policies include a business exclusion clause. This clause precludes drivers from utilizing their personal UM coverage while operating as a driver for a third-party carrier, such as Uber. The implication is stark: Uber drivers, especially during Phase 2, might find themselves without any UM coverage, contrary to their beliefs.

Legislative Recommendations:

In light of these issues, we recommend the following legislative actions:

  1. Clarifying Independent Contractor Autonomy: Legislators should reinforce the rights of independent contractors in making informed decisions about their insurance coverage.

  2. Mandatory UM Coverage: Implement laws that require ride-sharing companies to provide UM coverage during all phases of a ride-sharing trip, including Phase 2.

  3. Policy Transparency and Informed Consent: Require companies to provide clear, comprehensible explanations of policy changes, ensuring drivers are fully informed.

  4. Expansion of Personal UM Policy Inclusions: Advocate for personal insurance policies to offer options that include coverage while driving for a third-party carrier, providing an alternative for drivers to secure their own UM coverage.


Uber's decision to reject UM coverage on behalf of its drivers during Phase 2, coupled with the prevalent use of adhesion contracts and the limitations of personal UM policies, creates a precarious situation for drivers. It underscores the necessity for drivers to be thoroughly informed about their insurance coverage and raises the potential for legal action against Uber. As legal professionals, we must advocate for clearer, fairer insurance practices and ensure that ride-sharing drivers are not left on the losing side of this pickle due to legal oversights or gaps in coverage.

Feel free to reach out with any questions or comments regarding this post. Your insights and inquiries are always welcome around the horn!

Scott Seegmiller, J.D.

Office Manager

Big League Law, Inc., (949) 777-5611




Legal Disclaimer: The information provided in this article is for informational purposes only and does not constitute legal advice. The material discussed is solely the opinion of the author and should not be relied upon as legal advice. Each individual’s legal situation is unique and requires consultation with a qualified attorney. Big League Law, Inc. does not accept any responsibility for any loss which may arise from reliance on information contained in this article. This article does not establish an attorney-client relationship. For legal advice specific to your situation, please contact a licensed attorney in your jurisdiction.

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