Friday, August 1, 2014

Using Transportation Network Companies to make a little extra money? It could cost you alot.

There has been alot in the news about ride sharing apps, or as they have more recently been defined, Transportation Network Companies (TNC). These companies use apps for smartphones and other devices to connect passengers to drivers in the area. It can be cheaper to use a TNC than a cab.

So who are theses TNC's? The big names in the news have been Uber, Sidecar and Lyft, though there are others.

Here is how it works.

I sign up with one of these TNC's to be a driver. You are visiting my town and you need a ride. You go into your app and request a ride. I pick up your request on my app and come pick you up and take you to someplace more fun. You pay me through your app on your phone, the TNC and I split the payment per our agreement. Later when you want to go back to aunties, you do the same thing but someone else may pick you up and take you back unless I'm in the area and get the message first. As to the fee, the TNC is in charge of that. Uber may charge more one week and less the next in the same city. So might any other TNC.  I as the driver collect no money, unless you tip me in cash, and I do not have any control of fees. Some drivers have tried to circumvent this system, however.

Sounds easy right?

Here is the complication. If you are in an accident, do you have insurance? Well, you have your own personal auto policy, that should cover you, right? Maybe, maybe not. The problem is when you have the app open but have not accepted a passenger request. Some of the TNC's say that your personal auto policy  will cover you, however in checking with the carrier you may find out that they will not. Once you open the app you are engaged in a commercial enterprise, according to the carriers definition, and are not covered on a personal auto policy. At lease one driver in California found this out in a really bad way. I asked a few auto carriers I work with and none of them cover you while the app is open, even if it is a commercial policy. Check with your insurance provider to see how they would determine coverage.

Another problem is that taxi and traditional transportation companies have to meet state and department of transportation vehicle safety requirements. TNC's don't. California is the first state to enact regulations for these companies which will hopefully make them safer.

 Keep in mind that TNC's are pretty new as are alot of things in the age of mobile computing. It will take time for the TNC's, regulators, and courts to come to terms on them. By then we may have automated citywide cars that will come to you with the push of an app.


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