You may know from the news, or from using the service yourself, that Uber has permanently changed how we hire transportation. In the past, a need for a ride usually meant calling or hailing a taxi. Uber, which launched in 2012 in the US, had its one billionth rider in 2015. In 2016 Uber estimated it had 40 million riders per month worldwide. Uber (and the similar service Lyft) offers customers quick access to rides from drivers (who operate their own vehicles on their own schedules) who are nearby. Because Uber drivers tend to drive in areas close to their homes, suburban and rural residents may have easier access to alternative transportation, where taxis are not as practical.
Riders and drivers each have their own Uber smartphone app, which links those who want rides with available drivers. When a customer requests a ride, available drivers in the area are alerted, and can either accept or decline.
Some people become Uber drivers because they want to make extra money. Usually these people like driving and conversation. They like the freedom to sign in to the app and be available to drive whenever they want, on their own schedule. If you want to be an Uber driver, what do you need to know?
In 2016, North Carolina passed its own law regulating Transportation Network Companies (TNCs) like Uber. It was prompted by a sad case from California where a 6 year old girl was killed by a negligent Uber driver. The case exposed some shortcomings in how insurance works with Uber. Since then, Uber has incorporated some of these additional protections into its corporate policies.
To be an Uber driver, you must own or be able to use a 4-door vehicle that is less than 10 years old, which can seat 4 or more passengers in addition to the driver. The vehicle must have valid plates and registration. In NC, the car must pass the annual state safety inspection.
You must have a valid drivers’ license, but it does not have to be a commercial or special license. You must be at least 21 years old with one year driving experience (or 3 years’ experience if you are under 23).
What about background checks on drivers? NC law requires national and local criminal background checks. No one can drive for Uber with more than 3 moving violations in the past 3 years, or one major violation in the past 3 years (like evading police, reckless driving, or driving with a suspended or revoked license). Also, having a conviction for DWI, fraud, sex offenses, theft, or acts of violence in the past 7 years makes you ineligible.
Uber requires each rider to set up an account. There are no “anonymous” riders, which helps keep drivers safe.
In NC, Uber drivers must have at least $50,000 per injury/$100,000 per year insurance for bodily injury, with a matching amount of uninsured/underinsured motorist coverage. (Note that this is higher than the NC minimum limits to drive your own vehicle, which is $30,000.) When driving an Uber passenger, Uber must provide a $1.5 million bodily injury policy in addition to the driver’s policy. When an Uber driver is logged onto the app but not carrying a passenger, the driver’s insurance is primary, and Uber has a $50,000 excess insurance policy in place. When an Uber driver is not working, of course, the only coverage is the driver’s coverage.
To avoid a bad surprise, keep in mind that a driver’s ordinary vehicle insurance policy may not provide any coverage (to people the driver injures, to the Uber driver, or for the vehicle used for Uber). This is because most ordinary policies specifically don’t allow coverage when the vehicle is being used for commercial purposes, like hauling paying passengers. It is possible to purchase extra coverage (an “endorsement”) to your ordinary policy to cover commercial use of the vehicle; if you do this, you can rest easier about having coverage in place. NC statutes require that you notify your insurance company and your lender (if you have a car loan) that you are going to drive for Uber.
NC law is clear that Uber drivers are independent contractors, not employees. That means their drivers are not entitled to workers’ compensation or unemployment compensation from Uber, nor are they subject to wage and hour laws. Uber drivers will have to pay their own taxes directly, since there is no tax withholding.
How do you get paid? Most riders pay their fare by Uber’s app, and Uber credits the driver’s share to his/her account. If a rider pays in cash without exact change, the Uber app will make change to put into the rider’s account, so that drivers do not have to carry cash.
After each ride, riders rate their drivers, and drivers rate their passengers. Uber uses this information to avoid matching parties who haven’t had a good experience before. If ratings problems are bad enough, a rider or a driver may be blocked from using the Uber service in the future.

Kim K. Steffan is an attorney with Steffan & Associates, PC in Hillsborough. She can be reached at 919-732-7300 or

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