Quick Answer
Yes, in most cases — through the company’s commercial insurance policy required by California Public Utilities Code §§5430-5443.5. In limited circumstances, the rideshare company can also be sued directly for negligent hiring, retention, or supervision when the driver had a disqualifying record. The practical recovery path almost always runs through the TNC’s $1,000,000 commercial liability policy.
Reviewed by Daryoosh Khashayar, ABOTA Member, founder and managing partner of Khashayar Law Group — Last updated May 2026.
Under California Public Utilities Code §§5430-5443.5, Uber and Lyft are classified as Transportation Network Companies (TNCs) and are required to maintain commercial liability insurance whenever their drivers have the app on. The level of coverage depends on the “phase” the driver was in at the moment of the crash — explained in our dedicated FAQ on California rideshare insurance phases.
Whether Uber or Lyft can be named as a direct defendant (rather than just as the insurer of record) depends on the driver’s classification at the moment of the crash and the specific facts. California law in this area has evolved rapidly through litigation under Assembly Bill 5 (AB-5), Proposition 22, and a series of California Supreme Court and appellate decisions. The state of the law as of 2026: direct vicarious liability for the driver’s on-the-job negligence is limited by the independent-contractor classification, but direct corporate liability remains available for the company’s own conduct — particularly negligent hiring, negligent retention, and inadequate background checks.
In practical terms, the largest recoveries in rideshare cases come from the $1,000,000 commercial liability policy plus the $1,000,000 uninsured/underinsured motorist coverage in Phase 3 (passenger in the vehicle). Daryoosh Khashayar evaluates every rideshare crash for both the insurance phase and any available direct claim against the platform.
Transportation Network Company (TNC) status was created by California Public Utilities Code §5431 to regulate Uber, Lyft, and similar app-based ride services. The classification imposes three obligations relevant to crash victims:
Violations of any of these obligations can support a direct claim against the rideshare company in addition to the standard claim against the driver.
A direct claim against Uber or Lyft for negligent hiring, retention, or supervision is available when:
These claims survive the independent-contractor classification because they are based on the company’s own negligent conduct, not on vicarious liability for the driver’s acts.
Uber and Lyft classify their drivers as independent contractors, which limits the traditional doctrine of respondeat superior (employer vicarious liability for employee acts). Proposition 22, passed in 2020, codified that classification specifically for app-based drivers. The classification has been challenged in California courts and at the U.S. Supreme Court level but remains the operative rule as of 2026.
In practice, the classification matters less than people assume. The $1,000,000 commercial insurance policy under PUC §5433 applies regardless of how the driver is classified — it is the company’s policy, mandated by California law. The classification only affects whether the company itself (rather than its insurer) is a direct defendant.
In a typical rideshare crash, the recovery comes from three potential sources:
Direct claims against Uber or Lyft for negligent hiring are layered on top in cases where the facts support them. Khashayar Law Group evaluates every available recovery source in the first 30 days.
This FAQ relates to our Rideshare Accidents practice. To evaluate every available recovery source, call (858) 509-1550 for a free consultation.