Background
Lenadanielle Figueroa rented a vehicle from Hertz through a program that supplied vehicles to Uber drivers. The rental agreement included insurance coverage. About six weeks later, another driver struck the vehicle while making a U-turn and fled. At the time, Figueroa had no passengers, was logged out of the Uber app, and was driving home.
Figueroa sought no-fault benefits through the Michigan Assigned Claims Plan rather than through the coverage associated with the rental vehicle. Her claim was assigned to Farmers Insurance Exchange, which denied it after investigating. Figueroa sued for benefits, and the Wayne Circuit Court granted Farmers summary disposition under MCR 2.116(C)(10), concluding that the Hertz vehicle’s insurer had priority under MCL 500.3114(2).
The Court’s Holding
The Court of Appeals affirmed. It held that Figueroa’s claim was governed by the first sentence of MCL 500.3114(2), which directs an operator injured in a motor vehicle operated in the business of transporting passengers to seek personal protection insurance benefits from the vehicle’s insurer. The statutory provision addressing passengers in transportation-network-company vehicles did not control because Figueroa was the vehicle’s operator, not a passenger.
Applying the primary-purpose/incidental-nature test, the court concluded that the vehicle was operated in the business of transporting passengers even though Figueroa was offline and driving home when the collision occurred. Her testimony established that she rented the vehicle through the Hertz-Uber program, used it for Uber during the vast majority of its time and mileage, drove for Uber about five hours each weekday, made little personal use of the vehicle, and relied on Uber driving as her only job and income. The vehicle’s insurer therefore had priority, and Farmers was entitled to summary disposition. The court did not reach Farmers’ alternative ground for affirmance.
Key Takeaways
- An operator’s no-fault priority claim under MCL 500.3114(2) turns on whether the vehicle was operated in the business of transporting passengers under the primary-purpose/incidental-nature test.
- A rideshare vehicle may satisfy that test even when the driver is logged out of the rideshare app, has no passenger, and is driving home at the time of the accident.
- The statutory exception concerning passengers in transportation-network-company vehicles did not apply because Figueroa was the operator.
Why It Matters
The decision emphasizes that no-fault insurer priority for rideshare drivers depends on the vehicle’s predominant use and the role passenger transportation plays in the driver’s overall business—not solely on the driver’s app status at the precise moment of a crash.
Insurers and rideshare drivers should therefore examine rental arrangements, mileage and usage patterns, employment activity, and sources of income when determining which insurer is first in priority for personal protection insurance benefits.