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Comment by philip1209 | Hacker News Reader

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philip1209

No insurance is a huge red flag to me

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Insurance and regulation arbitrage is basically the name of the game for Uber, Lyft, and Airbnb as far as I can tell.

That sounds clever and informed but is mostly obnoxious.

Are you describing your own comment?

That's very meta!

I didn't mean to offend, but I apparently have. I truly believe what I said, so I would like to know how would you suggest I improve the comment?

You could improve your comment by acknowledging that most businesses cajole, skirt, finagle or ignore regulations when it suits their purpose and they think they can get away with it. Uber and AirBnB did not invent this game.

> Uber and AirBnB did not invent this game.

True, but most businesses (outside finance) have other ways to make money besides cajoling, skirting, finagling or ignoring laws (or the latinate "regulations," as you prefer).

> or the latinate "regulations," as you prefer

"Regulation" (at least in the US) is a broader category, covering both "laws" passed by elected lawmakers and "rules" made by unelected public servants.

For starters, suggesting that the primary cause of their success is anything other than consistently executing at a high level is insulting.

Secondly, Uber got big using exclusively licensed town cars. And vacation rentals have been around for centuries.

What? It's well known that both Uber and AirBnB long relied on their users to operate unlicensed jitneys and unlicensed, uninspected, uninsured lodging houses.

Uber originally was exclusively licensed town cars. Vacation rentals have been around for centuries.

And both are primarily successful because they have executed at a very high level on a consistent basis.

To me, the game of the "sharing economy" is to use the vastly lowered transaction and communication costs of the internet to make better use of unused capital. Cars and housing in those cases.

That regulation is a decade or two behind the technology is unfortunate, but merely a side story.

I spend two nights with Airbnb hosts. Both had a spare room, one was home writing her thesis the other a single mother. Both could use the additional money more than the few minutes of bathroom/kitchen time that I used.

I also spend a couple nights with family - they don't have any special insurance or taxes for me either. I don't really see any difference, I didn't annoy the neighbours in any case.

Existing, old school carpool programs don't check to see if drivers have insurance, so how is this anything new?

Existing, old school carpool programs aren't paying their drivers, either. Which means it isn't commercial use. Which means your regular auto insurance covers it. Unlike this.

The amounts seem purposely low so as to appear like non-commercial activity.

They get around this by limiting the amount of payment to the drivers' costs (i.e. the IRS standard mileage rate of $0.54/mile.)

From the TOS:

"...we may charge you to reimburse the Carpool Driver for the costs associated with a Carpool Ride provided to you. [...] Reimbursements may include per mile charges at up to the prevailing IRS standard mileage rate, and other expenses like tolls and parking fees." (Emphasis mine)

That's an interesting legal theory, but I wouldn't want to be the test case.

If they wanted/needed to pay a higher amount, could Lyft get around this by paying the driver two fees - a first constrained one to skirt the insurance rules and then a "separate" fee for another component such as advertising or data provision or something else plausible but arbitrary?

If it walks like a duck, smells like a duck, and quacks like a duck, a court is very likely to call it a duck.

A 1992 email from Richard Stallman about libreadline's license is, oddly enough, relevant here:

"The issue first arose when NeXT proposed to distribute a modified GCC in two parts and let the user link them. Jobs asked me whether this was lawful. It seemed to me at the time that it was, following reasoning like what you are using; but since the result was very undesirable for free software, I said I would have to ask the lawyer.

"What the lawyer said surprised me; he said that judges would consider such schemes to be 'subterfuges' and would be very harsh toward them. He said a judge would ask whether it is 'really' one program, rather than how it is labeled.

"So I went back to Jobs and said we believed his plan was not allowed by the GPL."

Judges are not computers, and are generally capable of seeing through your clever plans.

I think it's debatable, legally, whether or not this constitutes commercial use. It's designed only for picking people up along a route you already drive regularly, and the monthly cap of $400 means no one could conceivably make a living off of it, even if they gamed it somehow and had multiple accounts.

Pretty sure normal insurance covers giving rides so long as you don't profit -- that is, as long as your compensation is no more than the cost of giving the ride, at which point it would become commercial activity, with a different risk profile.

People shouldn't just worry about "no insurance" but also underinsurance. Minimal insurance in many areas is ridiculously too low. If you're signing up to do this as a driver you better #1 Tell your auto insurance company and #2 Up your insurance levels to the max (something you should probably do anyways if you can afford it).

If you're signing up to do this as a rider, well I don't think you should given the insurance problems and you not having any guarantee that someone will be held liable if they cause an accident.

Getting into a bad accident with an underinsured driver at fault is a life changing event.

Or make sure you have health insurance.

Your own health insurance is one thing - compared to it, your liability in the event of an accident is essentially unbounded.

How? I am not driving the car.

Yeah. Perhaps my comment was not clear. They made it sound like you were in grave danger if you merely rode in the car of someone with insufficient automotive insurance, to which my answer is "make sure you have health insurance." Actually, that's my answer to many things.

I suppose they can't offer insurance because the insurance company didn't know how to compute the price. In other words, because Lyft is doing something very different than what has happened for the previous 6 or so years, the insurance industry doesn't know how to react.

Sounds like an opportunity to me.

Oh, you could find an underwriter for everything if you look enough. It's just that the premium might be very high.

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