People hurt in a Lyft or Uber crash often ask whether they can sue the company itself. The honest answer: usually the claim is against the driver, paid by the large insurance policy New Jersey law requires the companies to carry. Suing the company directly is possible in narrower situations, and the company's arbitration terms can change where that claim is heard.

The usual claim: against the driver, paid by the rideshare policy

A negligent driver is responsible for the crash they cause. What makes rideshare cases different is the amount of insurance behind that driver. Under N.J.S.A. 39:5H-10, the coverage depends on the driver's status in the app:

  • App off: only the driver's personal auto policy.
  • App on, waiting for a request: at least $50,000 per person and $100,000 per accident in liability coverage.
  • Ride accepted through drop-off: at least $1,500,000 in liability coverage, plus $1,500,000 in uninsured and underinsured motorist coverage.

The driver, the company, or both together can provide this coverage. If the driver's own coverage lapses or doesn't meet the requirement, the company's insurance must pay from the first dollar and defend the claim (N.J.S.A. 39:5H-10(d)). In practice, that means a claim against the driver is often a claim against the rideshare company's insurer. Who pays in each app period.

Why the company says it isn't responsible

Employers are normally responsible for their employees' carelessness on the job. Uber and Lyft classify drivers as independent contractors, and they rely on that to argue they aren't automatically liable for a driver's crash. That classification is contested. In 2022, New Jersey's Department of Labor announced that Uber had paid $100 million in back unemployment contributions, penalties and interest after state audits found drivers had been misclassified. Uber disputed the state's position. Whether a driver counts as an employee for a particular legal purpose depends on the law involved, so this question doesn't automatically resolve an injury claim either way.

When a direct claim against the company may exist

Separate from the driver's carelessness, a company can be responsible for its own negligence. Examples that may support a direct claim:

  • Negligent screening or retention. New Jersey's rideshare law sets out mandatory background checks and lists convictions and driving records that disqualify a driver (N.J.S.A. 39:5H-17 through -20). Letting a disqualified driver keep driving can be evidence of negligence. Background checks and negligent hiring.
  • Ignoring impairment complaints. The companies must have a zero tolerance policy on drugs and alcohol, investigate rider complaints, and cut off a driver within 72 hours once a complaint is corroborated (N.J.S.A. 39:5H-14).
  • Letting the wrong person drive. The companies must take steps to stop unauthorized drivers from using someone else's account (N.J.S.A. 39:5H-21).

Each of these depends on proof of what the company knew and when. That evidence sits in the company's records, which is why early preservation letters matter. The app data that decides rideshare cases.

The arbitration clause

Uber's and Lyft's terms of service include arbitration agreements. New Jersey's Appellate Division has enforced Uber's arbitration terms against injured riders in several recent unpublished decisions, sending the claims against Uber to private arbitration while claims against the other drivers stayed in court. Arbitration doesn't erase a claim, but it changes the forum and the strategy. How arbitration affects rideshare injury claims.

The verbal threshold usually doesn't apply

A New Jersey rule that surprises many people: in a lawsuit arising from a prearranged ride, neither the rideshare company nor its driver may use the limitation on lawsuit option (the "verbal threshold") as a defense (N.J.S.A. 39:5H-10(j)). For an injured passenger, that can remove one of the biggest obstacles in an ordinary New Jersey car case. What the verbal threshold is.

Deadlines

The two-year deadline in N.J.S.A. 2A:14-2 applies to most rideshare injury claims. Uninsured and underinsured motorist claims also carry policy notice requirements, so report early.

Learn more on our Uber and Lyft accidents page.