!!!!!!!!!!!!!CAUTION!!!!!!!!!!!!! …..SLIPPERY WHEN UBER….

Unclear & Present Danger: Graves Amendment insurance financial responsibility loophole is the Crown Jewel of Uber’s subprime lease & rental car scam

Graves Amendment has GUTTED Florida’s Financial Responsibility laws (and Uber exploits the loophole like a champ)

“The Florida statute merely induces but does not require rental (and lease) companies to ensure that lessees have the requisite amount of insurance coverage…
There is a conflict between the Graves Amendment and Florida’s “Financial Responsibility Laws” outlined in section 324.021(9)(b)1 and 2, Florida Statutes. Although still current law, the Graves Amendment purports to nullify this provision. As such, the Eleventh Circuit Court of Appeals and the Supreme Court of Florida both ruled that the Graves Amendment has gutted Florida’s financial responsibility law.” Matt Dolman

History: FLHSMV insurance statutes regulate the LEGAL OWNER of a vehicle used as a taxicab. Not the driver who leases or rents a car used for transporting passengers. And FLHSMV require minimum limit B.odily I.njury L.iability coverage for owners of vehicles used as taxicabs ergo Taxis can’t slime through the Graves Amendment financial responsibility loophole. Uber has duped lawmakers nationwide into insurance regulating the TNC Company NOT the legal owner of a vehicle used as a TNC passenger transporter “rideshare”. And that my friends is Uber’s ace in the hole for their contracted lease & rental car providers AND UBER to completely evade Florida’s financial responsibility laws via the Graves Amendment loophole. Here’s why…


Uber is keeping their fingers crossed their hanwritten “model legislation” gets rammed through the Florida Legislature and signed by Governor Rick Scott BEFORE they find out about the loophole created by the federal Graves Amendment Uber and its contracted Lessors (Bama, CoxFlexDrive, Uber owned Xchange) and Rental Agent (Enterprise Miami) are exploiting to evade Florida’s financial responsibility statutes…

As per Matt Dolman of the National Trial Lawyers Organization:

“A free pass for rental (& leasing) companies…
The Graves Amendment provides in the pertinent part that,

An owner of a motor vehicle that rents or leases the vehicle to a person (or an affiliate of the owner) shall not be liable under the law of any State or political subdivision thereof, by reason of being the owner of the vehicle (or an affiliate of the owner), for harm to persons or property that results or arises out of the use, operation, or possession of the vehicle during the period of the rental or lease, if

(1) the owner (or an affiliate of the owner) is engaged in the trade or business of renting or leasing motor vehicles; and
(2) there is no negligence or criminal wrongdoing on the part of the owner (or an affiliate of the owner).”

Translation: You are screwed if you get hit by a Lyft or Uber driver who rents or leases his car via a 3rd party or any of Uber’s contracted car providers. ESPECIALLY if the driver is off duty and his personal insurance and the TNC deny the claim

To be clear: The Graves Amendment dates back to 2005. Floridians are exposed to the loophole it created simply because the Florida Legislature has chosen thus far not to close the gap by creating a minimum limit B.odily I.njury L.iability statute for ALL car owners. FLHSMV only requires PIP(10) and PDL(10) to register a car. Time to drop the PIP requirement & replace it with a BIL requirement.

And when Matt Dolman wrote the article in 2014 alerting the public to the Graves Amendment loophole due to the lack of a BIL statute rental and lease car agents were using to evade Florida’s financial responsibility statutes Uber had barely made landfall here yet.

But Uber’s practice of building a firewall to continue the charade “Uber is not a taxi company” while contracting with 3rd party lease and rental agencies to provide UberCars for its drivers just blasted fresh Sunshine on the “injustice” of the Graves Amendment loophole.

And with the amount of leased & rental cars Uber is flooding our roads with (like Enterprise/Uber Miami) suddenly the Graves Amendment loophole just became more… well… Grave.

Let’s apply Uber’s cloak of regulatory darkness to The Uber Enterprise Corporate Account in Miami and the Graves Amendment. As per Matt Dolman:

“Also unsettling is the fact that under the Graves Amendment, there is no provision that requires uninsured drivers to buy insurance from rental companies, and in fact it is not uncommon for companies to rent to uninsured motorists. In… states like Florida, it is quite possible for… drivers who lack automobile insurance to rent cars and cause collisions that leave the injured without recourse.” (*Remember Uber provides ZERO app off coverage)
“Victims of collisions caused by uninsured and underinsured motorists driving rental (& leased & Uber orchestrated leased) vehicles have little remedy for their injuries because of the misleadingly-named Safe, Accountable, Flexible, and Efficient Transportation Equity Act. This injustice will continue until state legislatures follow the lead of California and Texas, and pass a statute requiring owners of motor vehicles to carry minimum bodily injury coverage.”

It was news to me BIL was not required in Florida for all car owners. Taxi Cab owners have been forced to maintain minimum limit BIL of 125/250 since 2006. Which is the reason why taxi insurance is $450 a month and just about every taxi insurer refuses to write us policies anymore due to the outrageous high limit/minimum limit of 125/250 legislators require us to buy. Insurers simply don’t want to be at the check writing end of those onerous limits.

This clearly speaks to why Uber is so adamant about NOT being defined as exactly what it is, a Taxi Company. And why lawmakers have to level the field with 10/20/10 minimum limit BIL PDL requirement for ALL Florida drivers AND THE LEGALLY DEFINED VEHICLE OWNERS including taxis & “personal cars” used for taking dispatch from a TNC.

Before reading Matt Dolman’s article I was completely mystified as to why lease and rental car agents would partner with Uber. After all they damn well know (as does Uber and Lyft) TNC grade rideshare insurance didn’t even exist in Florida until a few months ago (FYI its $565 a month Farmer’s Foremost) And they damn well knew Uber and Lyft drivers were forced to lie to their personal insurance companies if they wanted to keep their Uber/Lyft jobs.

Yeah, MAYBE Uber’s smoke and mirror “industry leading” $1 million dollar insurance would kick in if a passenger was in the car…

But why would a rental or lease agent not only contract with Uber Lyft but also hand their asset (car) over to a TNC driver who is 100% UM each & everytime they turn their app off?

No personal insurer in Florida will cover any part of on duty OR OFF DUTY TNC driving!

Why would Uber & Lyft’s commercially contracted 3rd party rental & lease agents force the drivers to sign a COMMERCIAL LEASE CONTRACT but advise them to buy “FULL COVERAGE PERSONAL INSURANCE” ? That 24/7 insurers NO ONE ?

I became even more perplexed when I read the Florida statute that insists if the lease driver doesnt maintain 100/300/50 THE LESSOR is financially responsible for $1 million dollars (+++ because the car is in commercial use). And thats 24/7. (NOTE: I was unaware of the Graves Amendment loophole at this time)

Matt Dolman explains the above referenced Florida Statute (which the Graves Amendment rendered null & void due to lack of required BIL):

Section 324.021(9)(b), Florida Statutes, caps the financial liability of lessors and owners who rent or lend their vehicles to permissive users. As long as the lessee or operator has insurance coverage of $500,000 combined for bodily injury and property damage, the lessors’ liability is limited to $100,000 per person, $300,000 per occurrence, and $50,000 for property damage.”

Graves Amendment: Mystery solved…

Section 324.021(9)(B) is a Ghost Statute. The financial responsibility clause is still on the books but is unenforceable due to the Graves Amendment. And will remain that way until the Florida Legislature creates a required minimum limit BIL statute for any car registered in Florida.

Uber, Lyft, rental agencies, and leasing agents are laughing all the way to the bank.

Thanks to the Graves Amendment:

Because no law exists REQUIRING the legal owner of the TNC car (including Enterprise Miami, Bama, CoxFlexDrive, & Uber Xchange) OR the lessee/rental driver to prove and maintain minimum limit specific BIL coverage you can’t sue them for 1 red cent. They are NOT financially responsible…

Now that’s what I call a TNC insurance gap

As per Matt Dolman:

“Lawyers representing individuals who were injured as the result of a rental car (or leased car) driver’s negligence understood the significance of being able to pursue the rental car company in tort for the injuries sustained. Especially in a state like Florida, where there are an alarmingly high number of uninsured drivers on the roadways…

holding the rental (lease ) car company liable under those circumstances was often the only way the victim could be compensated for her injuries. However, in one fell swoop, the potential avenue for recourse outlined in Section 324.021(9)(b), Florida Statutes was preempted upon the passage of the Graves Amendment.”

Perhaps Uber will be remembered by history as the company that aired all of America’s regulatory dirty laundry that stifles our economy : Off shore tax havens, antitrust price fixing, Forced Arbitration, misclassification of workers, Taft Hartley which neutered independent contractors & blocked collective bargaining, The IRS pretax loophole Uber is exploiting in NYC which aggrevates CON-gestion Uber claims to alleviate , and now the Graves Amendment. Economist Larry Mishel nailed it. “The problem is not Uber. The problem is systemic.”

Call to Action: Florida Legislature

Per Matt Dolman, there is light at the end of the Graves Amendment Tunnel. (But the Florida House & Senate has to flip the regulatory switch to turn the light on…)

“The Graves Amendment does include the following savings clause in section (b):

(*Note (b)(1) Also applies to any renter or lessor who supplies a car to an Uber or Lyft driver)

Financial Responsibility Laws. Nothing in this section supersedes the law of any State or political subdivision thereof – (1) imposing financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle; or

(*Note(b)(2) also applies to Uber & Lyft. Uber is engaged in the trade or business of renting or leasing motor vehicles. They control the lease process via contract & deducting weekly lease payments from driver’s earnings. They give “free rental promotions” for enough trips completed in a week.)

(2) imposing liability on business entities engaged in the trade or business of renting or leasing motor vehicles for failure to meet the financial responsibility or liability insurance requirements under State law.”

( (b)(2) is a call to action for Florida lawmakers to “impose liability” on a “business entity” (Uber) “engaged in the business of renting or leasing motor vehicles” (Uber) for failure to meet the financial responsibility or liabilility insurance requirements under state law”)

Matt Dolman goes on to explain:

“The savings clause to the Graves Amendment states that it will not supersede a state law that imposes “financial responsibility or insurance standards on the owner of a motor vehicle for the privilege of registering and operating a motor vehicle.” However, the Graves Amendment fails to define “financial responsibility.”

I look to Matt Dolman’s article for advice on what does the Florida legislature has to do to close the Graves Amendment Gap? Which is critical now that Uber has taken this financial responsibility gap and turned it into an “Uber lease” lack of financial responsibility Grand Canyon?

(Matt Dolman): “Minimum mandatory coverage is not enough…
Section 324.021(7), Florida Statutes, does mandate an OPERATOR (not owner) of a motor vehicle carry a minimum of $10,000 bodily injury, $20,000 single crash and $10,000 property damage insurance coverage AFTER a collision involving bodily injury or risk the suspension of his license and all registrations of his vehicles. This provision passes scrutiny under the Graves Amendment. See Kumaarsingth v. PV Holding Corp., 983 So. 2d 599 (Fla. 3d DCA 2008) (recognizing that the statutory minimum financial responsibility requirement of the above statute still applied after the codification of the Grave’s Amendment).
However, this minimum mandatory is little comfort to someone who suffers a catastrophic injury as the result of the negligence of an uninsured driver (ME: remember personal insurance in Florida covers no Uber or Lyft driver EVER including OFF DUTY) who rents (ME: or leases) a car (ME: or Uber LYFT use car) in Florida. In that case, the rental car company’s only obligation may be to pay the minimum of the policy. Unless the rental car company was itself negligent—for example, in failing to verify that the lessee has a valid driver’s license—there is no further recourse against the rental car company for the injured party. (ME: Ouch!)
It is now clear that the Graves Amendment preempts section 324.021(9)(b) (financial responsibility), Florida Statute in its current form…

and that the legislature has yet to pass a bill requiring motor vehicle owners (ME: Especially Uber Lyft lease & rental car owners) to carry minimum bodily injury coverage” (ME: which would close the Graves Amendment loophole Uber is exploiting)

Accordingly, educating drivers on the importance of having uninsured and underinsured motorist (UM) coverage is critical in order to protect your clients as well as other drivers on the road.”

UM more important than ever with Uber & Lyft sharing your roadways

Cheap transportation is great. But no “magic pill” has created this condition. It’s 100% risk shift. Onto the TNC drivers and onto the general public (yup, you too pedestrians, cyclists, and innocent bystanders)

Uber reminds me of that old short story “The Lottery”. The community stones someone to death once a year for the good of the community as a whole. No one remembers how the ritual came to pass. But if challenged an elder would reply- It’s PROGRESS… ending the yearly murder by stoning would be like returning to the dark ages.

Uber’s biz model is exactly like “The Lottery”. Once in a while someone will get sacrificed. But hell. It’s PROGRESS…

I don’t want to be #ubered. Do you? Call your Reps and Senators.

  • Uber legislated 24/7 primary insurer UNLESS they have an insurance certificate on file from the driver proving TNC friendly coverage for the specific period a crash occured in
  • Uber legislated to defend their TNC driver in court 24/7 UNLESS the driver’s main insurer agrees to represent the driver and has that TNC coverage in force on their main policy
  • Create a minimum limit BIL statute for all legally defined car owners in Florida (especially Uber & Lyfts contracted rental and lease car providers for each coverage period)
  • Repeal the outrageous current taxi insurance requirements and level the field. Uniform lower limits for Taxi & TNC drivers to register a car in Florida 10/20/10.