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Uber Eats Not Required By Statute To Maintain $1.5 Million In UIM Coverage (NJ)

September 30, 2022

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On September 27, 2022, raised as an issue of first impression in <a href="">Malzberg v. Josey, et al.,</a> no.: A-2883-20, a New Jersey state appeals court held that insurance coverage requirements under the state's Transportation Network Company Safety and Regulatory Act (“TNCSRA”) do not apply to Uber Eats’ food delivery services. Specifically, the three-judge panel affirmed summary judgment in favor of defendant, James River Insurance Co. (“James River”) finding that underinsured motorist coverage required under the TNCSRA was limited to regulating transportation network companies that use app-based services to connect passengers to drivers for prearranged passenger rides but not necessarily for connecting consumers to food delivery services.

In Malzberg, plaintiff, Scott Malzberg (“Plaintiff”) enrolled with an Uber subsidiary, Portier LLC, to use his motorcycle to deliver food through Uber Eats subsidiary, Portier, LLC (“Uber”). While making a delivery, traveling on a North New Jersey highway, Plaintiff collided with Caren Josey (“Josey”) and was thrown from his motorcycle. Plaintiff sustained significant injuries requiring multiple surgeries which exceeded Josey’s personal insurance policy. Generally, under the TNCSRA, transportation network companies must provide at least $1.5 million in underinsured motorist coverage. Uber’s insurer, James River denied underinsured motorist benefits to cover costs exceeding Josey’s coverage being that the commercial policy provided coverage for Uber drivers while transporting passengers but not while delivering food orders.

Upon filing suit against Josey and James River, the Essex County Superior Court granted summary judgment in favor of James River in January 2019, dismissing Plaintiff’s claim for underinsured motorist coverage. On appeal, Plaintiff’s argued that food delivery drivers should be afforded the same protection as those transporting passengers since the risk of accident and injury are the same despite specific language in the TNCSRA providing the same.  Irrespective, the court held that the TNCSRA, as presently written, only protects drivers who are in the process of arranging or providing a ride, essentially punting the issue back to the legislature to provide clarity.

However, the opinion does note that pending legislation supplementing the TNCSRA would establish insurance requirements for businesses using a digital network driver for pre-arraigned delivery of goods. <em>See</em> <u>S. 468</u> (as amended by Senate, Mar. 24, 2022). While this pending legislation seeks to bridge gaps in the law created by a constant evolution of technology, the TNCSRA, as presently interpreted, does not require transportation network companies to provide underinsured motorist coverage to food delivery drivers.

Thanks to Kendal Hutchings for her contribution to this article.  Should you have any questions, contact <a href="">Matthew Care</a>.


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