SACRAMENTO -- Ride-sharing company Uber is upping the ante in its drive to persuade government regulators that the public is protected when its drivers are between fares.
Uber announced Friday that it was closing a so-called insurance gap in its service. It's providing contingency insurance that covers property damage and injuries caused by an Uber driver even when he or she is between fares but available for hire via a smartphone application.
The loophole, which was publicly identified in a recent report by the California Department of Insurance, became an issue last New Year's Eve when an Uber driver, while not carrying a passenger, struck and killed a 6-year-old girl as she crossed a San Francisco street with her family.
According to initial reports, Uber distanced itself from the accident, emphasizing that the driver was not covered by Uber's liability policy because he did not have a passenger at the time.
Uber and other ride-sharing companies, such as Lyft, have provided $1 million of liability coverage that exceeds a driver's personal insurance limits. However they only applied when a passenger was in the car or when a driver had accepted a request for a ride.
Now, Uber says it's the first and only company in the country to provide coverage when a driver is between passengers and hasn't accepted a new ride request. The new policy will provide drivers with liability coverage that meets or exceeds the legal requirements of all states.
The new insurance deals with any damage and injuries not under the driver's personal policy, Uber said.
Lyft said it soon plans to offer similar insurance coverage on a state-by-state basis.
"We want to be sure that drivers can feel confident getting in cars and working with Uber, and they have coverage in the time between trips," said Uber Chief Executive Travis Kalanick.
The new coverage, he said, was aimed at satisfying concerns of state and local transporation regulators and answering criticism from the taxi industry.