Leadership1 publisher2 min readPublished
Lyft's ride-hailing insurer denied an injured driver's claim the day after his crash
Osahon Aburime says he was driving to a Lyft passenger when he crashed in North Carolina. Sixteen months later he walks with a cane and his minivan has been repossessed. Mobilitas has not paid. Lyft says its insurance meets state rules.
The Board Room · Leadership desk
What happened
- Osahon Aburime, a North Carolina Lyft driver, was in a car accident on Mother's Day last year as he drove to pick up a passenger he had accepted on the app.
- Sixteen months on he uses a cane to walk, and an attempt to go back to driving for a ride-hailing platform did not work.
- North Carolina's insurance department wrote that the denial contained incorrect information, including the wrong time and the assertion that he was not en route to a passenger, which he denies.
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Why it matters
- cost The household is absorbing roughly $27,200 of foregone Lyft earnings at his old rate, plus the car he crashed and the minivan a lender took back, while the claim stays open.
- constraint The state regulator's help stopped at a referral to private counsel. An injured contractor who cannot pay a lawyer has no cheap way to contest a denial.
- exposure The platform's name travels with the dispute while the decision sits with an insurer that has kept the denial in place and did not answer questions about it.
- precedent If arbitration is the realistic forum, platforms should expect gig-work injury and deactivation disputes to be priced in months of process for awards in the tens of thousands.
The denial turns on one disputed fact. Mobilitas, which provides ride-hailing insurance to Lyft, told Aburime the crash did not happen while he was on his way to pick up a passenger, and he says it did [10]. North Carolina's insurance department wrote that the denial also had the wrong time in it [10]. Some details have since been corrected and the denial stands [11]. Mobilitas did not respond to Business Insider's request for comment [11].
Lyft answered the story with a description of the policy it buys. A spokesperson said, "We maintain auto liability insurance that meets local and state regulations" [5]. Whether an injured driver is paid is settled by the company handling the claim, and that company denied this one a day after the crash [9]. "These rideshare companies tell you that you are covered if something like this happens," Aburime said [13].
He had made about $80 on the app the day of the crash, money toward dinner with his wife and a gift for his mother [7]. Before the accident he typically earned around $1,700 a month on Lyft, on top of his wife's pay from an eye clinic [6]. Sixteen months later he has not been able to earn, and at his old rate that is roughly $27,200 of platform income the household has not seen [3][8][18]. He lost the Chevy Malibu he was driving, and a lender repossessed his minivan earlier this year after he fell behind on the payments [14][8].
Lyft's sentence is accurate. Local and state rules set what auto liability the platform must carry, the platform carries it, and a contractor's lost wages were never inside that policy [5]. Being right about the policy still leaves the driver with a forum problem. Business Insider wrote that independent contractors on these apps often have fewer protections than traditional full-time employees [19]. Aburime went to the North Carolina Department of Insurance for help. It told him to look for a lawyer, and he says he cannot afford one [12].
Arbitration is the other route, and it is slow. One Instacart worker won $28,000 in back pay after a months-long arbitration over a deactivation, Business Insider reported [16]. Gig companies have deactivated workers' accounts, in some cases, drivers said, after an overcharge at a store checkout [15]. Aburime's case is an injury claim, and the forum open to him is the same private one. "I don't think any company should treat the people who work with them like this," Aburime said [17].
What to watch
- Whether Mobilitas reverses the denial or states the basis for it; it has not responded to questions about the claim.
- Whether the North Carolina Department of Insurance does more than refer Aburime to a lawyer he says he cannot afford.
- Whether any state ties platform insurance-compliance language to coverage for a driver's own injuries and lost income.