The transportation industry is building its digital foundations on ride sharing apps. Instead of waiting for a public transport, the people are easing their lives and saving their time by picking the lowest rates, selecting the services, choosing the best suited directions for long distances, and earning all other benefits of ride sharing apps.
The Concept of Ride Sharing and Ride Sourcing
According to Susan Shaheen, who is a transportation researcher at the University of California, the concept of ride sharing emerged during the World War 2 times. It was conceived to save the tires and invest the rubber resource in other types of inventions. Ride sharing was known as van pooling, car pooling, or pool riding during those days.
In the light of the concept of ride sharing, all the sources which give information about transportation come under the category of ride sourcing. But in this digital age, the term ride sourcing is specifically assigned to ride sharing apps. Ride sharing apps are safer to gather information about the transport but there are many drawbacks of using ride sharing apps, both for the passengers and the drivers.
The Risk of Ride Sharing Apps for Drivers
The ride sharing apps have stricter computerized system of hiring the drivers. If you don’t fulfill any one of the qualification conditions entered into the system, you will be rejected to work as driver for ride sharing apps. There are many other risks associated with ride sharing apps for drivers. Some of the risks are listed down here.
• Driving for ride sharing apps requires you to have your personal vehicle. Along with the ownership comes the requirement to pay for the insurance and cover the repair and maintenance costs.
• You need to be an independent contractor for becoming a ride-sharing driver. As an independent driver, you are not entitled for overtime payments if you work more than 40 hours a week. On the other hand, you have to cover up the costs and tax bills from your paychecks. These payments may also include quarterly estimated tax payments.
• The ride sharing apps track the closest available drivers and assign the responsibilities to them. Due to the proximity issues, many drivers get lesser assignments as compared to other drivers.
• Ride sharing apps track many drivers in the similar locality which means that you are always competing with countless drivers at a time.
The Risk of Ride Sharing Apps for Passengers
The passengers often prefer tracking the drivers and available transit pools with the help of car sharing apps but there are many risks involved for the passengers as well. Listed here are some of the risks of ride sharing apps for passengers.
• When getting a car pool on the road, you only pay for the ride, fuel, and tax involved in it. Ride sharing apps are run by different companies including Lyft, Uber, and SideCar. The companies authentically track the car pools for you but they also charge you and the driver for meeting their organizational expenses. The charges are made indirectly in the form of increased fare and taxes.
• The driver works as an independent contractor for ride sharing apps which reduces the security for passengers. The transport and taxi companies have complete information of driver and vehicle which makes it easier to track the driver in case of theft or any other crime. The independent drivers cannot be tracked if they switch down the phone or shut down the ride sharing app source after committing a crime.
• The drivers working for ride sharing apps pay for insurance and other expenses of vehicle which may end up as higher charges.
• The rules and regulations of ride sharing app companies are different from the rules set by federal government for taxi services. As ride sharing app companies work as independent companies, there are no significant rules to be implemented on them. On the other hand, the passengers are also unaware of the rules of ride sharing app companies due to their confused status. The companies neither completely fall in the category of taxi services nor in software houses.
Risks for Drivers and Passengers
There is lack of insurance protection as well which directly or indirectly affects the drivers and passengers both. For example, the business model and policies of UverX do not completely meet the requirements of security specifically for the drivers who use UberX vehicles for private and commercial business purposes. For signing up with the $40 billion worth company, the drivers need to get proper insurance.
According to Philomena Comerford, operating in Toronto as CEO of Baird MacGregor Insurance Brokers, most of the drivers stick to their personal auto insurance policies instead of getting commercial policies. While they don’t serve as paid drivers of UberX due to lack of meeting company conditions, they are also paid limited returns in case of serious accident due to the violation of personal policy terms. On the other hand, it also financially exposes the passengers.
A recent update on insurance policies reveals the restriction of insurance coverage for public transport vehicles by the Financial Services Commission of Ontario. Uber responded by offering contingent coverage of its drivers without revealing the new company policies. According to the insurers, Uber’s attempt is an interim measure but there still is a dire need of remodeling the transport sharing insurance policies.
On the whole, the ride sharing apps are beneficial in several ways. These are time-saving in a way that you can track the directions and request for a vehicle without waiting for long hours on road. But it is important to seriously consider the risks of ride sharing apps and quickly resolve them for safe rides and safer future. While ride-sharing can save you time and money, it can end up being costly if you suffer a loss.