Uber is under siege.
It's not from a rival company, such as Lyft or Sidecar, because they may be in the same boat. It's from states that are warning passengers they may not be covered by insurance if the driver has an accident.
New Jersey last week became the 14th state along with the District of Columbia to issue warnings about the risks of using ride-shares such as Uber, Lyft or Sidecar.
Drawn by the power and ease of summoning a personal driver at the push of a smartphone button, passengers may not think to ask what happens when things go wrong. States, prodded by traditional tax bases, say rideshare companies may not be providing sufficient coverage. The budding industry says that's not true and they are being targeted for providing a competitive service.
Consumers, apparently, are caught in the middle.
Jason Herrera knows this only too well. He and a co-worker survived a crash in an UberX car that left them with injuries and unpaid medical bills.
"You buy a car, it comes with a warranty, you go step in a cab, you've got coverage," he told NBC Bay Area.
"I stepped into an Uber car and I have to question whether or not I'm going to be covered if there's an accident?" he said.
Back on September 25, 2013, co-worker Nikolas Kolintzas thought Herrera was dead. He was unconscious. Blood was coming from his mouth and head.
The pair were in San Francisco for a tech conference. Both had used "Uber Black" in the past, which sells rides from licensed chauffeurs of black sedans and SUVs. "UberX" was the hot startup's latest, cheaper offering.
There's a few reasons UberX costs less: a regular person can become an UberX driver; they're not licensed chauffeurs; and they use their own cars. UberX drivers can also use their existing personal auto insurance policy. They're not required to get commercial liability insurance. So if an UberX driver gets into a crash, an insurance company can deny the claim.
Taxi companies say rideshare companies cut corners, leaving passengers at risk. A lawsuit filed May 21 by Connecticut taxi and livery firms asserts that Uber and Lyft "prey parasitically on existing taxi and livery services." To highlight potential risks of using rideshare services, The Taxicab, Limousine & Paratransit Association, representing 1,100 taxicab companies, has launched the "Who's Driving You?" campaign.
"They do not submit to regulation," and their insurance protections are "inadequate and unsafe," said Dave Sutton, a spokesman for the initiative.
States and municipalities are scrambling to figure out how to deal with fleets of unregulated independent contractors picking up and dropping off travelers for money on their streets. Three states, California, Colorado, and Illinois have advanced bills to create new rideshare specific regulations. Colorado's rules await the governor's signature. The Illinois measure is expected to reach its governor's desk soon. But even California's, which passed the insurance commission in the assembly, is still under active negotiation.
California, Connecticut, the District of Columbia, Idaho, Kansas, Maryland, Michigan, Minnesota, Nebraska, New Jersey, New Mexico, Ohio, Rhode Island, Tennessee and Utah have all issued warnings about possible insurance risks from using rideshare services.
Meanwhile, the burgeoning industry says taxi companies are trying to suppress competition.
"They didn't evolve, they didn't compete. Now rather than catch up they're playing games to protect their monopolies," said Uber spokeswoman Nairi Hourdajian. She called the Connecticut lawsuit "baseless." Lyft said the assertions were based on "misinformation." Margaret Ryan, a spokeswoman for Sidecar, another rideshare company, said its safeguards make it as safe, if not safer, than a taxi.
Livery industry mudslinging was the farthest thing from Kolintzas' and Herrera's minds as their concussions wore off. Instead, they got another shock. When they filed a claim with the driver's insurance company, as instructed by Uber, the driver's insurance company refused to pay their medical bills, asserting that the driver was "driving for profit," according to the lawsuit they filed against Uber.
The suit claims unspecified compensatory damages for medical expenses, wage loss, breach of duty, and general negligence.
"There's no insurance gap at all on any trip on the Uber system," said Hourdajian, who declined to share dollar figures on claims paid. She said the company's $1 million policy (Lyft and Sidecar have similar policies), provides enough coverage in case a driver's personal insurance does not. In contrast, said New Jersey Department of Banking and Insurance spokesman Marshall McKnight, many municipalities require taxis to carry $300,000 in coverage. Sidecar's Ryan said the company is not aware of any case where insurance has failed to cover injury or vehicle damage.
But states say the rubber has yet to hit the road on how well passengers are protected under the rideshare companies' additional measures.
"Being covered by different policies for different uses of the vehicle is a new concept that has not been tested under our state's laws and in our courts," said New Jersey Insurance Commissioner Ken Kobylowski in a statement.
Hourdajian says Uber's commercial ridesharing insurance policy has been in place since its launch in early 2013.
"It has absolutely been tested—and the system works," she said.
Even if there is an insurance gap on the part of a rideshare driver, other protections may apply to keep passengers from having to pay for any injuries out of pocket, industry experts say.
Passengers who also own cars will have their auto insurance follow them into a rideshare car, said Kara Cross, general counsel for the Personal Insurance Federation of California, an industry group. And depending on their state, passengers' medical expenses may be covered up to their plan limits by their policy's Personal Injury Protection, depending on their state's regulations, said Progressive Insurance spokesman Jeff Sibel.
Of course, normal deductibles and limits apply.
"The onus is on the passenger to ask the right questions," said Insurance Information Institute spokeswoman Jeanne Salvatore.
However, one thing passengers may not easily be able to discern is the driver's past record.
In an undercover investigation, NBC Chicago hired several UberX drivers and ran their own background checks on them and found numerous tickets and a questionable driving history. One driver had 26 tickets. NBC Los Angeles got an ex-con hired as an UberX driver, even though she had priors going back two decades, including burglary, drugs and assault.
"There are felons getting through. People that should not be driving are driving for hire," said the taxi association's Sutton.
Last week, a Los Angeles driver for Uber was charged with suspicion of kidnap for the purpose of sexual assault, NBC Los Angeles reported.
The rideshare services say their background checks are conducted by third parties and can exceed what's required of taxi drivers. Applicants are screened for their driving history and a criminal records check is run, which includes county and state level databases, as well as the national sex offender registry.
Despite the assurances, Kolintzas and Herrera are still waiting for someone to take responsibility for their medical bills. Kolintzas continues to suffer from anxiety problems, said their attorney, Colleen Li. Though Uber has a PDF of its insurance policy posted on its blog, Li said Uber didn't make that information available at the time of the crash and she hasn't gotten proof the policy was in effect when her clients were injured. Uber declined to comment on the case, citing the pending litigation.
Even after their experience, Kolintzas and Herrera have remained Uber customers. They've just gone back to using Uber Black. That way, Li said, they know their driver is carrying commercial driver's insurance.
—By Ben Popken, NBC News