Your Customer Drives for Lyft or Uber. What Can You Do?

• By: Amber Hackett Crosby
• On: 10/05/2017 10:42:24
• In: Texas Posts
• Comments: 0

A lienholder's primary concern is protecting the value of his or her collateral. The vehicle's value may be reduced if the vehicle is involved in a collision, or if it has more miles on it than could be reasonably expected for a similarly-aged vehicle. Both of these scenarios are likely with a vehicle that's being driven for hire.
 
The first potential line of defense would be to declare a customer in breach of the retail installment sales contract. This option may be available if the customer represented that the vehicle would be used for a personal, family, or household purpose in the RISC, and instead used the vehicle in a commercial capacity. Many commercially available contracts state that the vehicle described will not be used for hire or rent. In such a case, a lienholder may be able to repossess the vehicle.
 
A second defense may be to require commercial insurance coverage on a vehicle that will be used as a ride-hailing car. A lienholder may prefer this option to making a case for fraud. Commercial insurance coverage is far more expensive than personal use auto insurance. This requirement may be enough of a deterrent that a customer would choose to earn money another way. An added bonus of such a requirement is that failure to maintain contractually required insurance coverage is a clear-cut default, and a lienholder could repossess the vehicle.
 
This landscape is new to regulators both state and federal. Until the various agencies issue formal rules regarding ride-hailing service drivers, the association urges dealers to consult an attorney before taking action regarding a customer who uses your collateral as a vehicle for hire.