Uber Techs., Uber Tort? The Impact of Transportation Network Companies on Pennsylvania's No-Fault Automobile Insurance System

Penn State Law Review Penn State Law Review

Volume 124 Issue 2 Article 8

4-1-2020

Uber Techs., Uber Tort? The Impact of Transportation Network Uber Techs., Uber Tort? The Impact of Transportation Network

Companies on Pennsylvania's No-Fault Automobile Insurance Companies on Pennsylvania's No-Fault Automobile Insurance

System System

Amber N. Morris

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Pennsylvania's No-Fault Automobile Insurance System,"

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587

Uber Techs., Uber Tort? The Impact of

Transportation Network Companies on

Pennsylvania’s Choice No-Fault

Automobile Insurance System

Amber N. Morris*

ABSTRACT

The rise of Uber and other transportation network companies

(“TNCs”) has created a puzzling question: At what point in time does a

TNC driver’s personal vehicle become a commercial vehicle? This

question is of the utmost importance when a party disputes liability after a

motor vehicle accident in which one of the drivers was a TNC driver.

Automobile insurance, however, fluctuates between states. In

Pennsylvania, for example, drivers elect to be insured by either full tort or

limited tort coverage, with full tort drivers exchanging higher premium

rates for more comprehensive coverage. A commercial vehicle exception

in Pennsylvania’s statute, however, upgrades a less-covered, limited tort

driver to full tort status if the driver was a passenger of a vehicle “other

than a private passenger vehicle.”

This Comment first explains automobile liability insurance in the

United States, with a focus on Pennsylvania liability law. This Comment

then proceeds to discuss the rise of TNCs and laws addressing TNCs in

Pennsylvania. Next, this Comment analyzes the overlap of Pennsylvania

TNC and liability laws to determine when a TNC driver’s personal vehicle

becomes commercial and how this distinction affects the driver’s tort

election status.

Ultimately, this Comment suggests that a TNC vehicle is commercial

any time the TNC driver is logged into the digital network. Thus, a limited

tort TNC driver should be upgraded to full tort status if an accident occurs

any time the driver is logged onto the digital network. Finally, this

Comment recommends that choice no-fault jurisdictions should amend

*J.D. Candidate, The Pennsylvania State University, Penn State Law, 2020. The

author gratefully acknowledges the advice and guidance of Professor Christopher C.

French, Professor of Practice at Penn State Law. Additionally, the author thanks her family

and friends for their continuous support and encouragement throughout the writing process.

588 PENN STATE LAW REVIEW Vol. 124:2

their TNC insurance laws to explicitly address the issue of tort status and

unambiguously confirm that a TNC vehicle is always commercial when

the TNC driver is logged onto the digital network.

Table of Contents

I.INTRODUCTION ............................................................................................... 588

II.BACKGROUND ............................................................................................... 592

A. Automobile Insurance Systems in the United States .................... 592

1. Tort Systems .......................................................................... 592

2. No-Fault Systems ................................................................... 593

B. Choice No-Fault Systems ............................................................. 594

C. The Rise of Transportation Network Companies ......................... 595

1. The Beginning of State Legislation ........................................ 596

2. Pennsylvania TNC Laws ........................................................ 597

III.ANALYSIS .................................................................................................... 600

A. When is a TNC Vehicle a Commercial Vehicle? ......................... 600

1. Furthering the Business of the TNC ....................................... 601

2. Bennett v. Mucci .................................................................... 603

B. Choice No-Fault Jurisdictions Should Create a Unified

Definition of a Commercial Vehicle Regarding TNCs ................ 605



IV.CONCLUSION ............................................................................................... 607

I. I

NTRODUCTION

The automobile insurance scheme in the United States is divided into

two systems: tort and no-fault.

Both systems vary across the United

States, depending on the laws of each state.

This Comment will focus on

Pennsylvania’s “choice” no-fault statute.

Specifically, this Comment will

discuss Pennsylvania’s commercial vehicle exception

to the statute and

how this exception should apply to transportation network companies

1. See Background on: No-fault auto insurance, NO-FAULT AUTO INS. (Nov. 6, 2018),

https://bit.ly/2SymFXz [hereinafter No-Fault Auto Insurance]. Tort insurance systems

generally allow an injured party to sue an “at-fault” party for both economic and non-

economic damages. See id. Conversely, no-fault insurance systems allow an injured party

to sue for non-economic damages only if the injured parties meet the state’s threshold

limitation on lawsuit. See id.

2. See id.

3. See infra Section II.B. “Choice” no-fault insurance systems allow consumers to

choose how they are insured—through either the typical tort system or the no-fault system.

See No-Fault Auto Insurance, supra note 1.

4. Pennsylvania’s commercial vehicle exception reads: “An individual otherwise

bound by the limited tort election shall retain full tort rights if injured while an occupant

of a motor vehicle other than a private passenger motor vehicle.” 75 P

A. STAT. AND CONS.

STAT. ANN. § 1705(d)(3) (West 2019).

2020 UBER TECHS., UBER TORT? 589

(“TNCs”)

like Uber and Lyft.

Further, this Comment will address

whether the commercial vehicle exception should apply to Phase I

of a

transportation network ride.

Unlike Pennsylvania, which is a no-fault state, parties injured in an

automobile accident in a state that follows a tort system may sue an “at-

fault” party

to recover two types of damages: economic

and non-

economic.

Conversely, in a state employing a no-fault system, parties

injured in an automobile accident may sue an at-fault party for non-

economic damages only if the injured parties meet the state’s limitation on

lawsuit.

Unless an exception applies, persons injured in a no-fault state

may only sue an at-fault party for non-economic damages if the injured

party meets the state’s statutory threshold.

The statutory threshold can be

either verbal or monetary.

Thus far, 12 states have adopted no-fault systems,

3 of which have

adopted choice no-fault systems.

A choice no-fault system allows

5. A transportation network company is “a person or entity that obtains a license to

operate a transportation network service . . . and uses a digital network to facilitate

prearranged rides.” 53 P

A. STAT. AND CONS. STAT. ANN. § 57A01 (West 2019).

6. See infra Section III.A.

7. Phase I of a transportation network ride refers to the time at which the

transportation network driver is logged into the digital network but is neither driving a

passenger to the destination nor on the way to pick up a passenger. See Auto insurance to

help protect you, U

BER, https://www.uber.com/drive/insurance/ (last visited Jan. 27, 2020)

[hereinafter Uber Insurance Policy]; see also Insurance, L

YFT, https://lft.to/2oNtqnj (last

visited Jan. 27, 2020) [hereinafter Lyft Insurance Policy]. During Phase I, the driver is

waiting to receive a notification that someone on the digital transportation network is

requesting a ride. See Uber Insurance Policy, supra; see also Lyft Insurance Policy, supra.

8. See infra Section III.A.

9. An “at-fault” party is the party that is legally liable for the automobile accident and

resulting injuries. See No-Fault Auto Insurance, supra note 1.

10. Economic damages, or actual damages, are those damages that carry provable

monetary value, such as medical expenses, lost wages, and property damage. See Ending

the Confusion: Economic, Non-Economic, and Punitive Damages, A

M. C. SURGEONS,

https://bit.ly/2n39Uqm (last visited Nov. 4, 2019).

11. See No-Fault Auto Insurance, supra note 1. Non-economic, or general damages,

are those damages that stem from subjective, non-monetary losses, such as loss from pain

and suffering, emotional distress, and loss of consortium. See A

M. C. SURGEONS, supra

note 10.

12. See No-Fault Auto Insurance, supra note 1. A limitation on lawsuit is a verbal or

monetary threshold that must be met before an injured party may bring a lawsuit against a

third party. See generally id. (discussing the variations on the no-fault automobile

insurance approach). Limitations on lawsuits are discussed further in Section II.A.2. of this

Comment.

13. See id.

14. See id.

15. The states that have adopted no-fault systems are Florida, Hawaii, Kansas,

Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota,

Pennsylvania, and Utah. See id.

16. Of the states that have adopted no-fault statutes, the states that have adopted a

choice no-fault system are Kentucky, New Jersey, and Pennsylvania. See id.; see also K

590 PENN STATE LAW REVIEW Vol. 124:2

individuals to elect their tort status, i.e., whether to be treated as an insured

in a tort system or as an insured in a no-fault system.

Insureds that elect

the tort system may sue an at-fault party for both economic and non-

economic damages without proving that the insured suffered serious

injuries.

Conversely, insureds electing the no-fault system may sue an at-

fault party for economic damages only if the insureds prove they suffered

serious injuries.

Because they elect for less coverage, insureds choosing

the no-fault system typically pay less in premiums for less coverage under

their insurance policy.

State legislatures implemented choice no-fault insurance systems in

an effort to decrease premiums and personal injury litigation.

Personal

injury litigation in traditional tort systems was typically drawn-out and

often failed to adequately compensate the injured party.

As with many

complex legal systems, issues arose that created questions for both the

legislature and the judiciary.

For example, the legislatures in choice no-

fault states carved out exceptions to the general rule if the general rule

would be prejudicial or unfair.

One such exception to the general rule

applies when an occupant of a vehicle “other than a private passenger

motor vehicle”—a commercial vehicle—is injured.

This Comment will focus on Title 75, Section 1705(d)(3) of the

Pennsylvania Consolidated Statutes, otherwise known as the commercial

vehicle exception.

In Pennsylvania, there is currently an unresolved

question as to whether TNC vehicles are considered private passenger

motor vehicles under Title 75, Section 1705(d)(3) of the Pennsylvania

Consolidated Statutes.

A TNC is a company that hires drivers as

REV. STAT. ANN. § 304.39-060 (West 2019); N.J. STAT. ANN. § 39:5H-10 (West 2019); 75

A. STAT. AND CONS. STAT. ANN. § 1705 (West 2019).

17. See No-Fault Auto Insurance, supra note 1.

18. See 5 JEFFREY O’CONNELL & SAMUEL H. MCCOY, LAW OF LIABILITY INSURANCE

§ 48.01, [2] (Matthew Bender & Co. ed. 2018). Pennsylvania law defines a “serious injury”

as an injury that resulted in “death, serious impairment of bodily function or permanent

disfigurement.” 75 P

A. STAT. AND CONS. STAT. ANN. § 1702 (West 2019).

19. See O’C

ONNELL & MCCOY, supra note 18.

20. See No-Fault Auto Insurance, supra note 1.

21. See 7 AM. JUR. 2D Automobile Insurance § 30 (2019); see also Rump v. Aetna

Cas. & Sur. Co., 710 A.2d 1093, 1096 (Pa. 1998); Walton v. Lumbermens Mut. Cas. Co.,

666 N.E.2d 1046, 1049 (N.Y. 1996).

22. See Automobile Insurance, supra note 21.

23. See generally No-Fault Auto Insurance, supra note 1 (discussing the effectiveness

of no-fault insurance regimes and the prevalence of fraudulent claims and fraud rings in

those states).

24. See, e.g., 75 P

A. STAT. AND CONS. STAT. ANN. § 1705(d)(1)–(3) (West 2019).

25. § 1705(d)(3).

26. See infra Section III.A.

27. See Daniel E. Cummins, Quandary on Whether Limited Tort or Full Tort Applies

to Uber Drivers, LEGAL INTELLIGENCER (June 27, 2019, 11:42 AM), https://bit.ly/2EiRp5Y

(“One such issue is whether an Uber or Lyft driver who has elected the limited tort option

2020 UBER TECHS., UBER TORT? 591

independent contractors

to provide pre-arranged car rides to customers

of the TNC through digital, application-based software.

In providing

these pre-arranged car rides, TNCs hire drivers to use the drivers’ personal

vehicles as the means of transporting customers.

This Comment addresses whether TNC drivers’ private vehicles are

considered “private passenger motor vehicles” under Pennsylvania’s

commercial vehicle exception.

First, this Comment details the tort and

no-fault systems in the United States.

Then, this Comment specifically

addresses Pennsylvania liability law regarding choice no-fault automobile

insurance.

This Comment discusses the rise of TNC laws throughout the

United States and in Pennsylvania, as well as TNC insurance requirements

under Pennsylvania law.

Next, this Comment analyzes the question of

when a TNC vehicle is a commercial vehicle under Pennsylvania choice

no-fault automobile insurance laws.

This Comment argues that a TNC

driver’s personal vehicle is commercial any time the driver is logged into

the TNC’s digital network.

Thus, Pennsylvania’s commercial vehicle

exception should apply to TNC drivers, and these drivers should be

considered full tort insureds when they are logged into the TNC’s digital

network.

Finally, this Comment recommends that legislators in

Pennsylvania and other choice no-fault jurisdictions amend their state’s

statutory language regarding TNC automobile insurance.

Statutory

amendments regarding TNCs must provide clear and unambiguous

language that explicitly applies the commercial vehicle exception to TNC

drivers.

Failure to amend TNC statutes could lead to unjust

compensation and an increase in litigation, which would frustrate the

purpose of no-fault automobile insurance.

under his own personal automobile insurance policy will be deemed to be a full tort plaintiff

if he is involved in in an accident while driving as an Uber or Lyft driver.”).

28. See Daniel Wiessner, Uber drivers are contractors, not employees, U.S. labor

agency says, R

EUTERS (May 14, 2019, 1:04 PM), https://reut.rs/38HJD3R; see also

Lawrenz Fares, Federal court holds that Uber drivers are independent contractors, J

URIST

(Apr. 12, 2018, 8:36 PM), https://bit.ly/38EiBKw (reporting that the United States District

Court for the Eastern District of Pennsylvania found that Uber drivers are independent

contractors).

29. See 53 P

A. STAT. AND CONS. STAT. ANN. § 57A01 (West 2019).

30. See id.

31. See infra Section III.A.

32. See infra Section II.A.

33. See infra Section II.B.

34. See infra Section II.C.

35. See infra Section III.A.

36. See infra Section III.A.

37. See infra Section III.A.

38. See infra Section III.B.

39. See infra Section III.B.

40. See infra Section III.B.

592 PENN STATE LAW REVIEW Vol. 124:2

II. BACKGROUND

The effect of Pennsylvania’s commercial vehicle exception on TNCs

encompasses two overlapping areas of law: automobile insurance and

TNC regulation.

Automobile insurance and TNC regulation are further

complicated by the distinction between Phase I and Phase II

of a

transportation network ride.

Given the complex nature of these areas of

law, this Comment will first introduce automobile insurance systems in

the United States and insurance regulations regarding TNCs.

A. Automobile Insurance Systems in the United States

Every state in the United States employs automobile insurance

statutes differently.

The automobile insurance system in the United

States is broken into tort systems and no-fault systems.

The no-fault

system can be further broken down into add-on states and choice no-fault

states.

1. Tort Systems

Historically, most states employed the traditional tort liability system

of automobile insurance.

Although some states changed their laws to

reflect no-fault language, most states continue to operate as tort systems.

In states employing tort systems, insured individuals who are injured in an

automobile accident may sue an at-fault party for both economic and non-

economic damages without first proving they suffered serious injuries.

Economic damages, or actual damages, are those damages that carry

provable monetary value, such as medical expenses, lost wages, and

property damage.

Non-economic, or general damages, are those damages

that stem from subjective, non-monetary losses.

Examples include loss

41. See 53 PA. STAT. AND CONS. STAT. ANN. § 57A01 (West 2019).

42. Phase II of a transportation network ride refers to the time in which the

transportation network driver accepts a ride request and is driving to pick a up a passenger.

See Uber Insurance Policy, supra note 7. Phase II lasts until the passenger reaches the final

destination. See id.

43. See infra Section II.C.2.

44. See infra Section II.A–C.

45. See generally No-Fault Auto Insurance, supra note 1 (discussing the different

automobile insurance systems in the United States).

46. See id.

47. See id.

48. See id.

49. See id.

50. See O’C

ONNELL & MCCOY, supra note 18. Although tort systems allow insureds

to sue third-party drivers, various state laws and judicial doctrines, such as contributory

and comparative negligence, may limit the amount of damages an insured may recover.

See id.

51. See AM. C. SURGEONS, supra note 10.

52. See id.

2020 UBER TECHS., UBER TORT? 593

from pain and suffering, emotional distress, and loss of consortium.

states that implement tort systems, the injured party must prove that an at-

fault party was at least negligent in causing the accident before the injured

party may recover damages.

2. No-Fault Systems

Although many states continue to use a tort system of automobile

insurance, state legislatures began a movement toward the no-fault system

in the 1960s.

Since the birth of this movement, 12 states have adopted a

no-fault system.

No-fault automobile insurance utilizes first-party

benefits

as the main source of recovery for an injured insured.

States

employing a no-fault insurance system require a minimum amount of

personal injury protection (“PIP”) that an insured must purchase to cover

first-party benefits.

Additionally, states employing a no-fault system cite

different thresholds that a first-party insured must meet before bringing a

tort action against a third party.

These thresholds can be either verbal or

monetary.

Verbal thresholds are thresholds that require prerequisite

circumstances to occur before bringing suit against a third party.

For

example, Pennsylvania prohibits insureds with no-fault insurance to

recover for non-economic damages unless they prove that they suffered a

“serious injury.”

A “serious injury” is an injury that resulted in “death,

serious impairment of bodily function or permanent disfigurement.”

the other hand, monetary thresholds are restrictions on lawsuits based on

the number of medical bills an injured party accrues.

For example,

53. See id.

54. See O’C

ONNELL & MCCOY, supra note 18.

55. See No-Fault Auto Insurance, supra note 1.

56. The states that have adopted no-fault systems are Florida, Hawaii, Kansas,

Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota,

Pennsylvania, and Utah. See id.

57. First-party benefits, often referred to as personal injury protection (“PIP”), are

payments made by the insured’s own insurance company, regardless of fault in the

accident. See id. First-party coverage varies by state and is usually limited based on medical

expenses, lost wages, and other out-of-pocket expenses. See id. An injured party generally

sues an at-fault party for additional funds once first-party benefits are exhausted. See

generally id. (explaining the role of first-party benefits in states with no-fault laws).

58. See Automobile Insurance, supra note 21.

59. See No-Fault Auto Insurance, supra note 1.

60. See id.

61. See id.

62. Florida, Michigan, New Jersey, New York, and Pennsylvania have enacted verbal

thresholds. See id.

63. See 75 P

A. STAT. AND CONS. STAT. ANN. § 1702(d) (West 2019).

64. Id.

65. Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah

have enacted monetary thresholds. See No-Fault Auto Insurance, supra note 1.

594 PENN STATE LAW REVIEW Vol. 124:2

injured parties in Minnesota must accrue a minimum of $4000 in medical

bills before suing an at-fault party.

No-fault systems were implemented in an effort to decrease

consumer premiums and costly personal injury litigation.

Premiums are

usually high in traditional tort systems compared to premiums in no-fault

systems.

Additionally, personal injury litigation is typically drawn-out in

tort systems and may not adequately compensate the injured party.

B. Choice No-Fault Systems

To further decrease burdensome litigation and allow consumers to

choose their means of insurance, several state legislatures adopted choice

no-fault systems.

Currently, three states employ the choice no-fault

insurance scheme.

A choice no-fault system allows consumers to choose

how they are insured. Consumers can choose to be insured under either the

typical tort system or the no-fault system.

Consumers who choose the tort system

may sue an at-fault party as

if these consumers reside in a typical tort jurisdiction.

Generally,

insureds electing “full tort” status

need not prove severe injury to sue an

at-fault party.

By contrast, insureds electing the no-fault system

are

treated as if they reside in a no-fault jurisdiction.

Thus, a limited tort

injured insured may only sue an at-fault party for non-economic damages

66. See id.; see also MINN. STAT. ANN. § 65B.51(3)(a) (West 2019).

67. See Automobile Insurance, supra note 21.

68. See id.

69. See id.

70. See Washington v. Baxter, 719 A.2d 733, 739 (Pa. Super. Ct. 1998).

71. See No-Fault Auto Insurance, supra note 1. States that follow a choice no-fault

regime are Kentucky, New Jersey, and Pennsylvania. See id.; see also supra note 16 and

accompanying text for each state’s choice no-fault statute.

72. See No-Fault Auto Insurance, supra note 1.

73. In Kentucky, a consumer is treated as a no-fault consumer unless the consumer

specifically refuses to consent to the limitations on lawsuit. See K

Y. REV. STAT. ANN. §

304.39-060(4) (West 2019).

74. Id.; see also N.J. STAT. ANN. § 39:6A-8(b) (West 2019); 75 PA. STAT. AND CONS.

STAT. ANN. § 1705(c) (West 2019).

75. A consumer choosing the tort system in Pennsylvania is labeled as full tort status.

See 75 PA. STAT. AND CONS. STAT. ANN. § 1705(c) (West 2019). A consumer choosing the

tort system in New Jersey is labeled no limitation on lawsuit status. See N.J.

STAT. ANN. §

39:6A-8(b) (West 2019).

76. See No-Fault Auto Insurance, supra note 1.

77. A consumer choosing the no-fault system in Pennsylvania is labeled as limited

tort status. See 75 PA. CONS. STAT. ANN. § 1705(d) (West 2019). A consumer choosing the

no-fault system in New Jersey is labeled limitation on lawsuit status.

See N.J. STAT. ANN.

§ 39:6A-8(a) (West 2019). In Kentucky, a consumer is treated as a no-fault consumer

unless the consumer specifically refuses to consent to the limitations on lawsuit. See KY.

REV. STAT. ANN. § 304.39-060(4) (West 2019).

78. See No-Fault Auto Insurance, supra note 1; see also K

Y. REV. STAT. ANN. §

304.39-060 (West 2019); N.J.

STAT. ANN. § 39:6A-8(a) (West, 2019); 75 PA. STAT. AND

CONS. STAT. ANN. § 1705(d) (West 2019).

2020 UBER TECHS., UBER TORT? 595

if the insured meets the verbal or monetary threshold outlined by that

state.

Pennsylvania utilizes a verbal threshold that requires limited tort

insureds to prove they sustained a serious injury before obtaining relief

from a third party for non-economic damages.

A serious injury is an

injury that resulted in “death, serious impairment of bodily function or

permanent disfigurement.”

To meet the “serious impairment of bodily

injury” standard, the injured insured must show: (1) what body function,

if any, was impaired because of injuries sustained in the motor vehicle

accident; and (2) that the impairment was serious.

In determining

whether the injury was serious, courts consider the extent of the

impairment, the length of time the impairment lasted, the treatment

required to correct the impairment, and any other relevant factor.

Like typical no-fault states, Pennsylvania’s choice no-fault system

also outlines specific exceptions to the general rule of limited tort status.

For example, if an injured insured meets one of the outlined categories in

Title 75, Sections 1705(d)(1) through (3), the party will be treated as a full

tort insured without necessarily proving serious injury.

Of the six exceptions outlined in Sections 1705(d)(1) through (3), this

Comment focuses on the commercial vehicle exception.

This exception

reads: “An individual otherwise bound by the limited tort election shall

retain full tort rights if injured while an occupant of a motor vehicle other

than a private passenger motor vehicle.”

In other words, injured persons

who elected Pennsylvania’s limited tort status are upgraded to full tort

status if they are occupants of a commercial vehicle at the time of the

injury.

C. The Rise of Transportation Network Companies

A transportation network company (“TNC”) is “[a] person or entity

that obtains a license to operate a [TNC] . . . and uses a digital network to

79. Pennsylvania and New Jersey outline verbal thresholds, whereas Kentucky

operates on a monetary threshold of $1000. See No-Fault Auto Insurance, supra note 1;

see also KY. REV. STAT. ANN. § 304.39-060 (West 2019); N.J. STAT. ANN. § 39:6A-8(a)

(West 2019); 75 P

A. STAT. AND CONS. STAT. ANN. § 1705(d) (West 2019).

80. See 75 P

A. STAT. AND CONS. STAT. ANN. § 1705 (West 2019).

81. Id. § 1702 (West 2019).

82. See Washington v. Baxter, 719 A.2d 733, 739 (Pa. Super. Ct. 1998).

83. See id.; see also Cadena v. Latch, 78 A.3d 636, 640 (Pa. Super. Ct. 2013); Graham

v. Campo, 990 A.2d 9, 16 (Pa. Super. Ct. 2010).

84. See 75 P

A. STAT. AND CONS. STAT. ANN. § 1705(d)(1)-(3) (West 2019).

85. See id.

86. See infra Section III. Pennsylvania’s commercial vehicle exception to limited tort

status is codified at 75 P

A. STAT. AND CONS. STAT. ANN. § 1705(d)(3) (West 2019).

87. § 1705(d)(3).

88. See id.

596 PENN STATE LAW REVIEW Vol. 124:2

facilitate prearranged rides [to its customers].”

TNCs utilize GPS-

technology and smartphone capabilities to provide modern ride-sharing

services.

With the convenience of GPS and smartphone-based

technology, TNCs such as Uber and Lyft have disrupted the market and

largely displaced most traditional taxi and livery services across the

globe.

This displacement of traditional taxi and livery services has led to

widespread litigation.

1. The Beginning of State Legislation

Because the advent of TNCs was so novel, little legislation was

passed until there existed an apparent need for such laws.

Indeed, the

desire to pass legislation was sparked in 2014 when a California Uber

driver struck and killed a child walking in a crosswalk in San Francisco.

Uber denied liability for the incident because, although the driver was

logged into the digital network at the time of the accident, the driver

neither had a passenger in his vehicle nor was on his way to pick up a

passenger.

Uber stated that “[t]he driver in question was not providing

services on the Uber system at the time of the accident.”

Although the subsequent court case was settled for an undisclosed

amount of money, the tragic accident motivated California lawmakers to

increase the regulation of TNCs.

The 2014 California regulations

specifically mandated that TNCs provide at least secondary insurance to

their drivers whenever the driver is logged into the digital network.

California was one of the first states to implement stricter laws regarding

TNCs, and many other state legislatures followed suit.

89. 53 PA. STAT. AND CONS. STAT. ANN. § 57A01 (West 2019).

90. See Erin Mitchell, Uber’s Loophole in the Regulatory System, 6 H

OUS. L. REV.

75, 76 (2015); see also How Uber Makes–And Loses–Money, CBI

NSIGHTS,

https://bit.ly/36yDHJ8 (last visited Feb. 4, 2020) (discussing the difference between

traditional taxi services and Uber’s double-sided marketplace business model).

91. See Mitchell, supra note 90, at 76.

92. See id.

93. See Vauhini Vara, Uber, Lyft, and Liability, N

EW YORKER (Nov. 4, 2014),

https://bit.ly/2Dtiva3 (discussing a tragic accident involving a minor pedestrian that

sparked adoption of stricter California legislation regarding TNCs).

94. See id.

95. See id. The Uber driver was in Phase I of a ride at the time of the accident. See

Uber Insurance Policy, supra note 7; see also Lyft Insurance Policy, supra note 7.

96. See Vara, supra note 93.

97. See id.; see also Fitzgerald Rodriquez, Uber Settles Wrongful Death Suit of

Sophia Liu, S.F.

EXAM’R (July 14, 2015, 12:00 AM), https://bit.ly/1Msvu8B; Josh

Richman, New Uber, Lyft, Sidecar insurance rules signed into law by Gov. Jerry Brown,

ERCURY NEWS (Sept. 17, 2014, 9:44 AM), https://bayareane.ws/2MVlTyv.

98. See Vara, supra note 93.

99. See Richman, supra note 97. In 2015, the National Conference of Insurance

Legislators (“NCOIL”) adopted a model act to regulate insurance requirements for TNCs

and their drivers. NAT’L CONFERENCE OF INS. REGULATORS, MODEL ACT TO REGULATE

INSURANCE REQUIREMENTS FOR TRANSPORTATION NETWORK COMPANIES AND

2020 UBER TECHS., UBER TORT? 597

2. Pennsylvania TNC Laws

Roughly two years after California incorporated stricter laws

regulating TNC insurance, Pennsylvania Governor Tom Wolf signed TNC

insurance requirements into law in 2016.

100

The law requires TNCs to

secure primary insurance for their drivers during all phases of a trip.

101

Primary insurance is defined as “[c]overage under an automobile

insurance policy . . . not . . . dependent on a personal automobile insurer

first denying a claim.”

102

Additionally, a driver’s personal insurance need

not first deny a claim before the TNC insurance triggers; a driver is

automatically covered under the commercial policy that is secured during

the specific phase of the trip.

103

The Pennsylvania TNC law addresses two phases of a TNC

rideshare.

104

Phase I begins as soon as the TNC driver logs into the digital

network and is waiting for a passenger to request a ride.

105

Phase II begins

when the driver accepts a ride request and is driving to pick up the

passenger, continuing while the passenger is in the driver’s vehicle.

106

Phase II ends when the ride is complete.

107

During Phase I of a trip, Pennsylvania law requires TNCs to provide

certain amounts of primary automobile insurance coverage.

108

Specifically, the TNC must provide coverage of at least $50,000 per

person for death or bodily injury, at least $100,000 per accident for death

or bodily injury, and at least $25,000 per accident for property damage.

109

The statute also requires TNCs to secure first-party medical benefits of at

least $25,000 for pedestrians and at least $5000 for drivers.

110

Both Uber

TRANSPORTATION NETWORK DRIVERS, at 1 (2015), https://bit.ly/2t9jgjD. As of June 21,

2018, every state except Oregon has enacted legislation regulating TNCs. See P

ROP. CAS.

INSURERS ASSOC. OF AM., TRANSPORTATION NETWORK COMPANY STATES WITH ENACTED

LEGISLATION (2018), https://bit.ly/1pB4nOl. Oregon’s proposed bill failed to pass through

the legislature in 2017. See id. Oregon legislatures introduced another bill to regulate

TNCs, however, in the 2019 regular session. See H.B. 3023, 80th Or. Legis., Reg. Sess.

(Or. 2019). H.B. 3023 was in the House Committee on Revenue upon adjournment of the

2019 Regular Session. See 2019 Regular Session HB 3023 B, O

R. ST. LEGISLATURE,

https://bit.ly/2nVwNMv (last visited Feb. 4, 2020).

100. See Daniel E. Cummins & Stephen T. Kopko, New Law: Mandated Coverages

for Uber and Lyft Vehicles, T

ORT TALK (Nov. 6, 2017), https://bit.ly/2PLvFGY; see also

53 P

A. STAT. AND CONS. STAT. ANN. § 57A07 (West 2019).

101. See § 57A07.

102. Id.

103. See id.

104. See id.

105. See supra note 7 and accompanying text.

106. See supra note 42 and accompanying text.

107. See id.

108. See § 57A07(b)(1)-(2).

109. See § 57A07(b)(1).

110. See § 57A07(b)(2).

598 PENN STATE LAW REVIEW Vol. 124:2

and Lyft adhere to these requirements.

111

Although TNC insurance is the

primary insurance during this Phase I of the trip, the driver’s personal

insurance can still cover the driver if the insurance company chooses to do

so.

112

During Phase II of a trip, Pennsylvania law requires TNCs to secure

primary automobile insurance of at least $500,000 for death, bodily injury,

and property damage.

113

Like Phase I, the TNC must also secure at least

$25,000 for pedestrians and at least $5000 for drivers in first-party medical

benefits.

114

Both Uber and Lyft implement these requirements.

115

Although both Uber and Lyft comply with the Pennsylvania laws

regarding TNC insurance coverage, the question still remains: At what

point does a TNC driver’s personal vehicle become a commercial

vehicle?

116

The answer to this question carries significant weight in

determining whether a driver qualifies as a limited tort or full tort insured,

and thus, must be thoroughly examined.

117

Under current Pennsylvania law, however, an insured electing

limited tort coverage on a personal insurance policy cannot later allege that

the vehicle is not a “private passenger vehicle” for the purpose of claiming

coverage under the commercial vehicle exception.

118

In Bennett v.

Mucci,

119

the plaintiff sustained injuries in a car accident involving a

vehicle he drove “solely for the operation of his business.”

120

Although the

plaintiff used the car solely for business purposes, he maintained personal

insurance, as opposed to commercial insurance, for the vehicle.

121

The

plaintiff elected the limited tort alternative when purchasing his personal

insurance.

122

At trial, the jury found that the plaintiff’s injuries were not

“serious,” as required under Title 75, Section 1705.

123

Thus, the jury

111. See Uber Insurance Policy, supra note 7; see also Lyft Insurance Policy, supra

note 7.

112. See § 57A07(l)(2).

113. See § 57A07(c)(1).

114. See § 57A07(c)(2).

115. See Uber Insurance Policy, supra note 7; see also Lyft Insurance Policy, supra

note 7.

116. See Cummins, supra note 27 (“The quandary in this regard is whether the Uber

or Lyft driver’s use of his own personal vehicle for business purposes triggers an exception

to the limited tort option.”).

117. See id.

118. See Bennett v. Mucci, 901 A.2d 1038, 1041 (Pa. Super. Ct. 2006) (“One who

elects limited tort coverage for a vehicle under a private passenger motor vehicle liability

insurance policy can not later claim that the same vehicle is not a private passenger motor

vehicle for purposes of § 1705.”).

119. 901 A.2d 1038 (Pa. Super. Ct. 2006).

120. Id.

121. See id.

122. See id.

123. See id. at 1039.

2020 UBER TECHS., UBER TORT? 599

awarded the plaintiff only economic damages.

124

The plaintiff appealed

the jury’s verdict.

125

On appeal, the appellant-plaintiff argued that, because he used the

vehicle for business purposes, his limited tort election should not be

binding based on the plain language of Section 1705(d).

126

The

Pennsylvania Superior Court disagreed and held that a person electing

limited tort status on a personal vehicle cannot later allege that the vehicle

is not a “private passenger vehicle” for the purposes of claiming the

commercial vehicle exception.

127

The court noted that accepting the

appellant’s argument “would undercut the General Assembly’s goals of

promoting financial responsibility.”

128

Although the Pennsylvania General

Assembly

129

has an interest in promoting financial responsibility, it has

also exhibited a preference for the full tort option, rather than the limited

tort option, when the driver’s tort status is in dispute.

130

In Bennett, the

Superior Court distinguished this general preference for full tort rights by

stating:

The result we reach in the instant matter is not in tension with our

General Assembly’s preference for full tort rights. Where, as here, the

insured is the victim of an accident in the vehicle for which he procured

limited tort coverage, the outcome under [Section] 1705 is not in

doubt.

131

The court in Bennett addressed Pennsylvania’s commercial vehicle

exception with regard to personal insurance policies only.

132

The court did

not address the exception when both personal and commercial policies

cover individuals,

133

as is the case when TNC drivers are driving while

124. See id.

125. See id.

126. See id. at 1041.

127. See id.

128. Id. at 1042.

129. The Pennsylvania General Assembly is Pennsylvania’s legislature. See General

Assembly Homepage, P

A. GEN. ASSEMBLY, https://www.legis.state.pa.us/ (last visited Feb.

4, 2020).

130. See L.S. v. Eschbach, 874 A.2d 1150, 1156–57 (Pa. 2005); see also Ickes v.

Burkes, 713 A.2d 653, 656–57 (Pa. Super. Ct. 1998) (“[T]he intent of the [Motor Vehicle

Financial Responsibility Law is] to provid[e] the full tort coverage whenever there is a

question as to which coverage is applicable.”); Berger v. Rinaldi, 651 A.2d 553, 557 (Pa.

Super. Ct. 1994) (“[I]n virtually every circumstance where there is a question about [which]

coverage will apply, there is a conscious attempt to rule in favor of the full tort alternative.”)

(quoting Consideration of H.B. 121 Continued, 1990 Assemb., 174th Sess. 214 (Pa.

1990) (statement of Rep. Richard Hayden, Representative, Pa. House of Rep.), available

at https://bit.ly/35oHk3F) [hereinafter Statement of Rep. Richard Hayden].

131. Bennett, 901 A.2d at 1041.

132. See id. at 1041–42.

133. See id.

600 PENN STATE LAW REVIEW Vol. 124:2

logged into the TNC’s digital network.

134

Thus, the question remains

whether a TNC driver’s tort election under the driver’s personal insurance

applies during Phase I of the trip.

135

The remainder of this Comment

explains why the commercial vehicle exception should apply to TNC

drivers whenever the driver is logged into the digital network, thereby

upgrading TNC drivers to full tort status.

136

III. A

NALYSIS

The rise of Uber and other TNCs presented novel issues for

Pennsylvania legislators, leading to new legislation regarding insurance

requirements in 2016.

137

Despite this recent wave of legislation, a complex

question still remains: At what point in time does a TNC driver’s personal

vehicle become a commercial vehicle?

138

This question is of the utmost

importance when automobile accident liability is disputed, specifically

regarding the insured’s tort election options in Pennsylvania and how these

elections affect insurance payouts.

139

Pennsylvania’s commercial vehicle

exception should apply whenever a TNC driver is logged into the digital

network, thereby upgrading limited tort TNC drivers to full tort status.

140

Further, choice no-fault jurisdictions should amend their laws to clearly

and unambiguously apply the exception to TNC drivers logged into their

digital networks.

141

A. When is a TNC Vehicle a Commercial Vehicle?

Because Pennsylvania mandates that TNC insurance be primary for

a TNC driver while the driver is logged into the TNC’s digital network,

142

whether a TNC vehicle is commercial during Phase II of a trip is largely

undisputed.

143

The question remains, however, whether the driver’s tort

134. See generally 53 PA. STAT. AND CONS. STAT. ANN. § 57A07 (West 2019)

(governing the minimum coverage TNCs must maintain for their drivers in Pennsylvania).

135. See Cummins, supra note 27.

136. See infra Section III.A.

137. See § 57A07; see also Cummins, supra note 27 (“As the use of Uber and Lyft

rideshares become more prevalent in Pennsylvania, it is more likely that motor vehicle

accidents involving such drivers will increase and thereby give rise to novel issues of

law.”).

138. See Cummins, supra note 27 (“One such issue is whether an Uber or Lyft driver

who has elected the limited tort option under his own personal automobile insurance policy

will be deemed to be a full tort plaintiff if he is involved in an accident while driving as an

Uber or Lyft driver.”).

139. See id. (“The quandary in this regard is whether the Uber or Lyft driver’s use of

his own personal vehicle for business purposes triggers an exception to the limited tort

option.”).

140. See infra Section III.A.

141. See infra Section III.B.

142. See § 57A07(f).

143. See Cummins & Kopko, supra note 100 (“[T]he statutory framework confirms

that a Lyft or Uber driver’s separate personal automobile insurance coverage typically will

2020 UBER TECHS., UBER TORT? 601

election under the driver’s personal insurance applies during Phase I of the

trip.

144

1. Furthering the Business of the TNC

During Phase I, a driver is neither driving a passenger to a final

destination nor on the way to retrieve a passenger; the driver is simply

waiting for a ride request.

145

One issue that arises in determining whether

the TNC driver is driving a commercial vehicle during Phase I is whether

the driver is furthering the business of the TNC when the driver is waiting

for a ride request.

146

Title 53, Section 57A07 explicitly states that a TNC must provide

primary insurance during all phases of a trip.

147

Section 57A07’s statutory

language requiring the TNC to provide primary insurance includes Phase

I of the trip–when the driver is not currently engaged in a pre-arranged

ride.

148

Additionally, the Section 57A07 explicitly allows the personal

insurance provider to opt-out of coverage when the driver is using the

vehicle “while the driver is logged onto a digital network or while a driver

provides a prearranged ride.”

149

The TNC driver’s personal insurance need

not apply to potential accidents during Phase I because the driver is

“logged onto a digital network.”

150

Under this scenario, the TNC driver is

furthering the business of the TNC in Phase I because the driver is waiting

for a ride request, which will initiate a new ride and lead to more company

revenue.

151

Unlike a TNC driver who is driving without the application

not come into play if the driver is involved in an accident resulting in personal injuries or

property damages.”).

144. See Cummins, supra note 27.

145. See supra note 7 and accompanying text.

146. See Johnson v. Glenn Sand & Gravel, 453 A.2d 1048, 1050 (Pa. Super. Ct. 1982)

(citing Pillo v. Mohan, 189 A.2d 850, 851 (Pa. 1963)) (“[T]he test for whether an agency

issue should reach the jury turns upon whether any reasonable inference from the facts

supports the finding that the employee was acting in furtherance of his employer’s

business.”). Note, however, that this case points back to an employee-employer

relationship. See id. TNC drivers, on the other hand, are independent contractors. See

Wiessner, supra note 28.

147. See § 57A07(a).

148. See § 57A07 (b)(1)–(2).

149. See § 57A07(l)(2) (“Nothing in this section shall require that a personal

automobile insurance policy provide coverage while the driver is logged into a digital

network, while the driver is engaged in a prearranged ride or while the driver otherwise

uses a vehicle to transport passengers for compensation; see also § 57A07(l)(1) (“Insurers

that write automobile in this Commonwealth may exclude any and all coverage afforded

under the policy issued to an owner or operator of a personal vehicle for any loss or injury

that occurs while a driver is logged into a digital network or while a driver provides a

prearranged ride.”).

150. See § 57A07(l).

151. See How Uber Makes–And Loses–Money, supra note 90 (“For Uber, growth

means faster pickup times, more drivers on the road, and potentially lower prices for riders.

It also means more revenue for Uber.”).

602 PENN STATE LAW REVIEW Vol. 124:2

open, a TNC driver waiting for a ride request is open for business.

152

TNC driver waiting for a ride request can be equated to a convenience

store clerk waiting for customers; even if customers do not engage in

commerce, the worker is nonetheless furthering the business of the

company by working. In this situation, a fact finder could make a

reasonable inference that the TNC driver was “acting in furtherance of his

employer’s business.”

153

Therefore, Section 57A07 is not negated simply

because a TNC driver is waiting for a ride request.

154

Conversely, a TNC driver could turn on the digital network with no

intention of furthering the business of the TNC. For example, a driver

could log on to the digital network and drive across town without picking

up, or attempting to pick up, a single passenger. This loophole could

potentially lead drivers to pay only the minimum amount for their personal

insurance, while unfairly reaping the benefit of full tort status.

155

applying Pennsylvania’s commercial vehicle exception to the TNC

driver’s tort election under the driver’s personal insurance, the driver could

use the TNC’s digital network while driving for non-business purposes–

the driver would be covered by the TNC’s commercial insurance policy

and would, therefore, be covered as a full tort driver.

156

Thus, allowing

Pennsylvania’s commercial vehicle exception to override a TNC driver’s

personal vehicle tort election could create substantial public policy issues,

including increased insurance fraud and insurance premiums.

157

Some may argue that the TNC driver is not furthering the business of

the TNC during Phase I; however this argument is fundamentally unfair.

Such an approach would unjustly disadvantage the TNC drivers who are

legitimately furthering the business of the TNC while they wait for a ride

152. See supra note 7 and accompanying text.

153. See Johnson v. Glenn Sand & Gravel, 453 A.2d 1048, 1050 (Pa. Super. Ct.

1982).

154. See generally § 57A07 (requiring TNCs to provide minimum primary insurance

for TNC drivers).

155. Automobile insurance is required in Pennsylvania pursuant to the Motor Vehicle

Financial Responsibility Law. See 75 P

A. STAT. AND CONS. STAT. ANN. §§ 1701–1799.7

(West 2019). Insureds must select whether they want to be insured as a limited tort or full

tort driver. See id. § 1705. Full tort drivers typically receive better insurance coverage in

exchange for higher premiums. See No-Fault Auto Insurance, supra note 1.

156. See § 1705(d)(3) (upgrading limited tort individuals to full tort status if they

were injured while a passenger in a vehicle “other than a private passenger motor vehicle”);

see also § 57A07(a) (West 2019) (mandating that the TNC insurance is primary and must

cover the TNC driver even if the driver’s personal insurance does not cover the claim).

157. See generally Insurance Fraud, N

AT’L ASS’N INS. COMM’RS,

https://bit.ly/2Gu2h3w (last updated May 14, 2019) (“Insurance fraud occurs when an

insurance company, agent, adjuster or consumer commits a deliberate deception in order

to obtain an illegitimate gain.”); see also Insurance Fraud is Driving Up Premiums, B

US.

INS. QUOTES, https://bit.ly/2GxykiL (last visited Nov. 4, 2019) (“[A] significant percentage

of a premium increase is to help cover losses due to insurance fraud.”).

2020 UBER TECHS., UBER TORT? 603

request.

158

Should the Pennsylvania General Assembly adopt the position

that the commercial vehicle exception does not apply to Phase I of a trip,

TNC drivers who are not abusing the system would be unfairly forced to

apply their tort election under their personal insurance policy.

159

This

inequitable framework could, therefore, result in less coverage for the

TNC drivers who are legitimately abiding by the system.

160

Potential abuse of the system, although important to recognize,

should not influence the legislature to unfairly strip rights away from those

who are adhering to the Commonwealth’s laws. Rather, the onus should

fall on the TNC itself to monitor its drivers’ locations and actions. The

TNC should monitor and track statistics including, but not limited to the

number of rides accepted and completed compared to the number of rides

requested, and how many rides were accepted and completed in a

timeframe. Therefore, the TNC should bear the responsibility of tracking

these statistics and any fraud that may arise from the application of the

commercial vehicle exception to Phase I of a TNC trip. TNCs should

report any abuse of the system by TNC drivers to the appropriate

authorities,

161

and the TNC should also internally handle such abuse.

Creating a duty on the part of TNCs to monitor their drivers’ statistics

would minimize abuse of the system.

162

2. Bennett v. Mucci

The case of Bennett v. Mucci

163

contributes to the conversation about

whether a TNC driver’s personal insurance tort election should apply

during Phase I of a TNC ride.

164

In Bennett, the Pennsylvania Superior

Court held that an insured electing limited tort coverage on a personal

158. Those who are not legitimately furthering the business of the TNC are

committing insurance fraud and raising premiums for all consumers, not just the TNC

drivers. See generally Insurance Fraud is Driving Up Premiums, supra note 157

(describing insurance fraud and fraud reporting services).

159. See generally § 1705 (outlining Pennsylvania’s election of tort options).

160. If the driver elected limited tort on the driver’s personal insurance policy, the

driver may only sue for economic damages unless the driver proves he or she sustained a

“serious injury,” pursuant to Section 1705. See id.

161. Many states have instituted fraud bureaus that investigate insurance fraud. See

Insurance Fraud, F

ED. BUREAU OF INVESTIGATION, https://bit.ly/1LNH0xR (last visited

Feb. 4, 2020). Additionally, the National Association of Insurance Commissioners has

created a uniform fraud reporting system, which allows consumers and insurers to

electronically report suspected insurance fraud. See N

AT’L ASS’N INS. COMM’RS, supra

note 157.

162. See generally Stopping Insurance Fraud, BUS. SEC., https://bit.ly/36xJGOl (last

visited Feb. 4, 2020) (discussing the implication of insurance fraud on businesses and how

businesses can protect their bottom lines).

163. 901 A.2d 1038 (Pa. Super. Ct. 2006).

164. See id. (holding that an insured electing limited tort coverage on a personal

insurance policy cannot later allege that the vehicle is not a “private passenger vehicle” for

the purpose of claiming coverage under the commercial vehicle exception).

604 PENN STATE LAW REVIEW Vol. 124:2

insurance policy cannot later allege that the vehicle is not a “private

passenger vehicle” for the purpose of claiming coverage under the

commercial vehicle exception.

165

This broad holding is inapplicable to

TNC drivers because TNC drivers carry two automobile insurance

policies—a personal policy and a commercial policy—whereas the

plaintiff in Bennett only carried a personal policy.

166

Because Bennett addressed tort elections regarding personal

insurance policies,

167

the question persists: Should Bennett govern TNC

drivers who hold both a personal and commercial insurance policy on their

vehicle? To date, Pennsylvania courts have not directly addressed this

issue. If this issue arises in Pennsylvania litigation, however, courts should

distinguish the facts in Bennett from applying the commercial vehicle

exception to a TNC driver.

Although the plaintiff in Bennett used his vehicle solely for

business purposes, he did not maintain a commercial insurance policy on

the vehicle.

168

Rather, he maintained only a single, personal insurance

policy for the vehicle.

169

Because two policies were not in dispute, the

Pennsylvania Superior Court held that the plaintiff’s tort election status on

his personal, and only, insurance policy was controlling.

170

A TNC driver operating during Phase I of a TNC ride does not fall

under the broad holding of Bennett.

171

Unlike the plaintiff in Bennett, a

TNC driver maintains both personal automobile insurance and the TNC’s

commercial insurance.

172

Because two competing policies exist, a conflict

arises regarding which coverage will apply.

173

When a coverage dispute

exists regarding whether the limited tort or full tort option should apply,

the General Assembly’s intent is to defer to the full tort option.

174

Given

165. See id. at 1041.

166. See id.

167. See generally id. (discussing the implications of electing limited tort coverage

on a personal insurance policy).

168. See id. at 1041.

169. See id.

170. See id. at 1042.

171. See id. at 1041 (holding that a driver who elects limited tort coverage under a

personal insurance policy cannot later claim the vehicle is not a private passenger vehicle

for the purposes of Title 75, Section 1705 of the Pennsylvania Consolidated Statutes).

172. See generally 53 P

A. STAT. AND CONS. STAT. ANN. § 57A07 (West 2019)

(enumerating the required automobile insurance coverage TNCs must provide for their

drivers).

173. The issue of competing insurance policies was addressed by Representative

Richard Hayden during the Pennsylvania House of Representatives hearings on House Bill

121. See Statement of Rep. Richard Hayden, supra note 130.

174. See L.S. v. Eschbach, 874 A.2d 1150, 1156–57 (Pa. 2005); see also Ickes v.

Burkes, 713 A.2d 653, 656–57 (Pa. Super. Ct. 1998) (“[T]he intent of the [Motor Vehicle

Financial Responsibility Law is] to provid[e] the full tort coverage whenever there is a

question as to which coverage is applicable.”); Berger v. Rinaldi, 651 A.2d 553, 557 (Pa.

Super. Ct. 1994) (“[I]n virtually every circumstance where there is a question about [which]

coverage will apply, there is a conscious attempt to rule in favor of the full tort alternative.”)

2020 UBER TECHS., UBER TORT? 605

this preference, courts should rule that a TNC’s commercial policy trumps

a TNC driver’s personal insurance when an accident occurs.

175

Thus, the

commercial vehicle exception should apply to a TNC driver who elected

limited tort on the driver’s personal insurance policy, thereby upgrading

the driver to full tort status if the driver is involved in an accident while

logged onto the TNC’s digital network.

B. Choice No-Fault Jurisdictions Should Create a Unified

Definition of a Commercial Vehicle Regarding TNCs

Currently, Pennsylvania law is silent as to whether the commercial

vehicle exception, codified under Section 1705(d)(3), applies while the

TNC driver is logged onto the TNC’s digital network.

176

By comparison,

New Jersey (another choice no-fault jurisdiction) explicitly states that the

limitation on lawsuit option

177

is not available for actions arising from a

“prearranged ride.”

178

Under New Jersey law, a “prearranged ride” is

defined as:

[T]he provision of transportation by a [TNC] driver to a [TNC] rider,

beginning when a driver accepts a ride requested by a rider through a

digital network controlled by a transportation network company,

continuing while the driver transports a requesting rider, and ending

when the last requesting rider departs from the personal vehicle.

179

Although New Jersey law is certainly more explicit than

Pennsylvania law

180

in denying the limitation on lawsuit option during a

prearranged TNC ride, Title 39, Section 39:5H-2 of the New Jersey

Statutes contains one major flaw. The statute fails to address whether the

limitation on lawsuit option applies during Phase I of the TNC trip when

(quoting Consideration of H.B. 121 Continued, 1990 Assemb., 174th Sess. 214 (Pa.

1990) (statement of Rep. Richard Hayden, Representative, Pa. House of Rep.), available

at https://bit.ly/35oHk3F).

175. See L.S., 874 A.2d at 1156-57; see also Ickes, 713 A.2d at 656-57; Berger, 651

A.2d at 557.

176. See 75 P

A. STAT. AND CONS. STAT. ANN. § 1705(d) (West 2019).

177. The limitation on lawsuit option is New Jersey’s version of the limited tort

option in Pennsylvania. Compare 75 PA. STAT. AND CONS. STAT. ANN. § 1705(d) (West

2019)(regulating limited tort coverage in Pennsylvania), with

N.J. STAT. ANN. § 39:6A-8(a)

(West 2019) (regulating coverage limitation on lawsuit coverage in New Jersey).

178. See N.J. STAT. ANN. § 39:5H-10(j) (West 2019) (“The limitation on lawsuit

option . . . shall not be assertable by a transportation network company or a transportation

network company driver in any action for damages arising from a prearranged ride, or be

asserted against any party not receiving personal injury protection benefits in any action

for damages arising from a prearranged ride.”).

179. N.J.

STAT. ANN. § 39:5H-2 (West 2019).

180. Title 53, Section 57A07 of the Pennsylvania Consolidated Statutes fails to

address whether the limited tort option under Title 75, Section 1705 of the Pennsylvania

Consolidated Statutes can apply at any time during a prearranged ride. See 53 P

A. STAT.

AND

CONS. STAT. ANN. § 57A07 (West 2019).

606 PENN STATE LAW REVIEW Vol. 124:2

the driver is not engaged in a prearranged ride.

181

Therefore, neither New

Jersey nor Pennsylvania law explicitly addresses whether the limitation on

a lawsuit or limited tort option, respectively, applies to Phase I of a TNC

ride.

182

Although case law regarding this issue is underdeveloped, this

question is one of significant importance and one in which legislatures

must resolve. Failure to adopt the commercial vehicle exception when a

TNC driver is logged onto the digital network could lead to an unjust

award of damages that are limited to the TNC driver’s personal tort

election.

183

Additionally, unclear statutory language could lead to

increased litigation regarding the scope and meaning of the statute.

184

For example, the at-fault driver’s insurance company would likely

claim that the TNC driver is bound by the driver’s personal tort election.

185

The insurer would pose this argument because it wants to pay as little

money to the opposing party as possible to protect its bottom line.

186

arguing the TNC driver is bound by the driver’s limited tort election, the

insurance company would need to pay only economic damages, unless the

driver proves the injuries were “serious.”

187

Conversely, the TNC driver would likely argue that Pennsylvania’s

commercial vehicle exception applies, thereby upgrading the driver to full

tort status, because the driver was operating under a commercial insurance

policy at the time of the accident.

188

TNC drivers would also likely argue

that they were furthering the business of the TNC when the accident

occurred and that current controlling case law in Pennsylvania, namely

Bennett v. Mucci, is inapplicable in such a situation.

189

Presently, the TNC laws in choice no-fault jurisdictions may lead to

unfair and unjust awards to plaintiffs, as well as increased litigation, both

181. See N.J. STAT. ANN. § 39:5H-10 (West 2019).

182. See id.; see also § 57A07.

183. For a discussion of insurance fraud and increased premiums, see supra Section

III.A.

184. See A.S. v. Pa. State Police, 143 A.3d 896, 905-06 (Pa. 2016) (“A statute is

ambiguous when there are at least two reasonable interpretations of the text.”). “Two

reasonable interpretations” therefore potentially lead to litigation over those

interpretations. See, e.g., id. (determining whether a statute was ambiguous).

185. See generally 10 Tactics Insurance Companies Use to Deny and Devalue

Claims, D

ICKERSON OXTON, https://bit.ly/2WQaC76 (last visited Nov. 4, 2019)(discussing

the ways in which insurance companies handle claims).

186. See id. (“The insurance company’s ultimate goal is to pay out nothing or as little

as possible on every claim.”).

187. See 75 PA. STAT. AND CONS. STAT. ANN. § 1705 (West 2019).

188. See id.

189. See supra Section III.A (discussing the significance of the TNC driver furthering

the business of the TNC and why Bennett v. Mucci should not apply when there exists a

personal insurance policy and a commercial insurance policy).

2020 UBER TECHS., UBER TORT? 607

of which directly contradict the purpose of no-fault insurance.

190

No-fault

systems were created in an attempt to decrease the burdensome and drawn-

out personal injury litigation in tort systems and to adequately compensate

the injured party.

191

Therefore, to protect the purpose of no-fault insurance,

legislatures in choice no-fault states should clarify that the commercial

vehicle exception applies to TNC drivers when the driver is logged into

the TNC digital network. Thus, choice no-fault jurisdictions should amend

their statutes to explicitly apply the commercial vehicle exception to TNC

drivers when the driver is logged into the digital network, thereby creating

a uniform definition of “commercial vehicle” as applied to TNC vehicles.

IV. C

ONCLUSION

The rise of Uber and other TNCs created complex questions for

legislatures throughout the United States.

192

This Comment addressed two

questions in particular: (1) at what point in time does a TNC driver’s

personal vehicle become a commercial vehicle;

193

and (2) whether this

distinction affects a TNC driver’s personal tort election option in the case

of an accident when the driver is logged into the TNC network.

194

The

TNC driver’s personal vehicle should be considered commercial any time

the driver is logged into the TNC’s digital network.

195

Therefore, the

commercial vehicle exception should apply to TNC drivers and TNC

drivers should thus be considered full tort insureds when they are logged

into the TNC’s digital network.

196

Pennsylvania and other choice no-fault jurisdictions should amend

their laws to reflect clear and unambiguous language adopting a uniform

definition of “commercial vehicle” as applied to TNCs.

197

Failure to adopt

clear and unambiguous statutory language could lead to unjust

compensation and an increase in litigation, which directly negates the

purpose of no-fault automobile insurance.

198

190. See Automobile Insurance, supra note 21; see also O’CONNELL & MCCOY, supra

note 18, at [1].

191. See Automobile Insurance, supra note 21; see also O’C

ONNELL & MCCOY, supra

note 18, at [1].

192. See supra Section II.C.

193. See supra Section III.A.

194. See supra Section III.A.

195. See supra Section III.A.

196. See supra Section III.A.

197. See supra Section III.B.

198. See supra Section III.B.