Consumer Protections in the Sharing Economy: Ride-Sharing and Home Rentals

The sharing economy provides platforms for private individuals to share goods and services. Common sharing economy platforms offer an alternative to taxicabs and hotels. However, you have to take steps to protect your property when using or sharing vehicles and homes. When you need help, the apps may not accept responsibility.

Understand your legal rights and obligations with the sharing economy to avoid common problems. Consider safety measures, insurance, and dispute resolutions before participating in the collaborative economy. For legal advice with the sharing economy, talk to a consumer protection lawyer.

Understanding the Sharing Economy

The rise of the sharing economy transformed the American market for consumers. Peer-to-peer services provided more options, lower prices, and ways for individuals to make money on the side. There are many types of sharing economy services. Some of the most common are ride shares and home shares.

The most common ride-sharing services in the U.S. are Lyft and Uber. Drivers apply for approval from the ride-share apps. When users look for a ride on their smartphones, the app matches up drivers and passengers. The online platform processes the payment and sends a portion of the money to the driver. Car-sharing apps have made it easier for many people to get around and provide a way for drivers to make some extra money.

Home-sharing apps include Airbnb and VRBO. Homeowners and renters can use the apps to make their rooms or homes available for short-term rentals. This provides an alternative to hotels, and homeowners can make extra money from their unused property.

Legal Responsibilities of Ride-Sharing and Home Rental Platforms

Many people who use these sharing economy platforms think the companies offer more protections than they actually do. These companies are careful to limit their liability whenever possible. They claim they are just providing a platform to exchange services between consumers.

Ride-Share Company Responsibilities

Ride-sharing companies provide limited insurance coverage for passengers and drivers when they’re actively providing rides. But when the app is off, drivers are on their own. For passengers, coverage only begins when the ride starts. Ride-share company insurance is limited, depending on the driver’s personal car insurance policy and state law. If you’re driving for Lyft or Uber, ensure your insurance covers ride-share driving.

Ride-share companies don’t provide the same protections as employers. Lyft and Uber drivers are not employees—they’re independent contractors. They don’t get health insurance, sick leave, or a guaranteed minimum wage. In 2020, California tried to pass a law classifying ride-share drivers as employees. However, the new technology companies have spent a lot of money to get an exemption.

Suppose you suffer an injury in a ride-share accident. In that case, the service provider’s responsibility can depend on who was responsible, the insurance coverage, and whether the app was running at the time of the accident. Even if Lyft or Uber should pay for the damages, you can have difficulty getting relief.

Home-Rental Company Responsibilities

Most people are careful about renting out their homes to strangers. Your home often represents your greatest financial investment. Homeowners need to make sure they are protected if something goes wrong.

Airbnb provides up to $1 million for third-party bodily injury and property damage claims. Airbnb insurance also covers up to $3 million in damages for your home and personal property. However, most homeowners insurance policies don’t cover short-term rentals. If you’re renting out your home, make sure your insurance covers Airbnb guests.

Ride-Sharing Consumer Rights

Passengers and vacationers don’t think they need to worry about consumer protections. They aren’t offering their cars or homes. However, if you use ride-share and home rental sites, you must consider your consumer protection rights.

Some passengers have safety concerns when getting into a car with a stranger. Uber and Lyft are secretive about their propriety information and reputation systems. Drivers have to pass the company’s background checks. However, safety data shows thousands of passengers have reported sexual assault.

Uber and Lyft drivers have financial incentives to do many rides in a short period of time. This can be a risk for unsafe driving. Ride-share drivers also divide their attention between the road and the apps, which can distract drivers and put passengers at risk. Consider the safety risks of ride-sharing and report any unsafe driving.

Home Rental Website Consumer Rights

When looking for a room or homestay online, photos can make the property look better than it is. However, several possible issues can come up when renting someone’s apartment, home, or room. Possible dangers for renters include:

• Unsafe property conditions
• Unsecured rooms or homes
• Theft
• Access to the property when you are out
• Hidden cameras or microphones
• Unsanitary conditions

Even Airbnb’s website recommends that you consider researching the host before a stay.

Tips for Safe Ride-Sharing and Home Rental Experiences

Don’t rely on the sharing economy platforms to protect your consumer rights. Be proactive about protecting yourself when using a ride-share or home rental website. Here are some tips to stay safe:

• Protect your personal information
• Don’t agree to pay outside of the app or website
• Always communicate through the app
• Read the driver’s or host’s reviews
• Have your driver confirm your name before you get in the car
• Check the license plate and vehicle description before approaching the ride vehicle
• Trust your instincts
• Check online for information about your host before an Airbnb stay
• Travel with other people when possible
• Call for help

What to Do If Issues Arise With a Ride-Share or Home Rental

If an issue arises with Lyft, Uber, or Airbnb, you should report it to the ride-share or home rental company. They may be able to resolve your complaint. Document any issues. Take photos and videos and save emails and text messages. Keep a record of your communications with the service provider. If they can’t resolve your issue, talk to a lawyer.

Contact a Ride-Share and Home Rental Consumer Protection Lawyer

A lawyer can review your ride-share and home rental issues and explain your legal options. They can negotiate with the app platform to help you get a refund, cover your financial damages, or get a settlement offer. Your lawyer can also hold the app, rideshare driver, or Airbnb host accountable by filing a lawsuit. For more information about how to protect yourself when using the sharing economy, talk to a consumer protection lawyer.