Is SeatsX a Scam?

Houston, TX – For the past several months, a new company called SeatsX has been posting signs and advertising in and around the Houston area. Last week we heard they were at the TNC lot recruiting Rideshare drivers out of IAH. So is SeatsX a scam or legit?

SeatsX by itself, is a newly formed company in TX, that connects riders with drivers who have extra seats in their vehicle. SeatsX describes itself as not a TNC (Transportation Network Company) but rather a online marketplace where drivers and riders can negotiate rates. Their website does not make it appear to be the most trustworthy, nor does their use of bandit signs, recruiting UberX drivers who do not carry commercial insurance. However, they have documents filed with the Texas Secretary of State, which leads me to believe they are probably “ok”. However, this does not mean that it is okay for you, a driver to pick up riders through SeatsX. There is one way you can do this legally, and only one way only. You HAVE to have the proper commercial insurance and applicable permits.

RIDERS BEWARE: If your driver does not have proper commercial insurance, you will not be covered in the event something happens. Because SeatsX has been recruiting UberX drivers out of the TNC lot, there is a high chance your SeatsX driver won’t have proper insurance.

But, it is carpooling like Waze, how is that illegal?
The only way carpooling is legal is if you either give the rider the ride for free, or you agree to no more than the federal reimbursement rate for privately owned vehicles, which is just enough to cover gas and operation of your vehicle. At which point, from a for profit prospective, it is simply not worth it. Otherwise, you will need to the following 2 requirements:

Commercial Insurance
Commercial Insurance is NOT to be confused with “Rideshare Insurance.” Many insurance companies offer a product for Rideshare. This is often more of a gap/cover your butt insurance, just in case you are not covered by Uber or Lyft. It is very important you talk with your insurance company about you doing rideshare if you haven’t done so already. If they find out you are doing rideshare, they can refuse to cover you, even if you are not even signed onto the app. These Rideshare Endorsements cost as little as $7 a month, so it is one of those things, Why not? I have heard it be as high as $50 more a month, but this is why you shop around and find the best deal.

Proper Permitting
For you to be able to pick up riders outside of Uber/Lyft/Other TNC apps, you need to get the proper permits for the city you are picking up in. Each city is different, and even smaller suburb cities have different rules and costs. A Houston permit for example, is not good for Conroe and vice versa. You can still drop off anywhere, but you won’t be able to pick up. SeatsX knows this, and this is why they have been sticking to suburbs. Less enforcement, if any permits are required. Keep in mind, whenever you get the permits, it is very likely you will be considered as a Taxi. You may need to install special equipment (which is not a bad thing, because your rate will be higher) However, both Uber and Lyft do not allow Taxicabs to pick up riders on Lyft, UberX, XL, etc. In some cities, Taxis are on Uber, However UberTAXI is an option for riders to choose, and the only driver you will get. In Texas, this is not an option that I am aware of. So, losing access to Uber and Lyft is something you need to think about. As well as you will be stuck to picking up riders in whatever city you can get permits in.

In summary, SeatsX while a legitimate company (and fairly good at marketing) is not going to provide you with proper insurance. If you do not have commercial insurance, STEER CLEAR! It is not worth the risk. All it will take is one wreck you and you will find yourself in bankruptcy.

Furthermore, if you do not carry permits, you can be caught and ticketed, hundreds, maybe thousands depending on where it is being enforced. There is also the little warning that cars can be impounded. Permit enforcement is less likely, but it is still possible.

One more thing.. If you do decide to go with SeatsX and have commercial insurance and the proper permits, you will be tempted to be the lowest price driver in the online marketplace. Don’t do it. Many riders have figured out that when they pay a little more, like UberComfort, they get a better ride and driver. Do not short change yourself. There will always be someone that is willing to work lower than you are. Don’t set the bar too high, but stick to a price that is fair to both you and the rider. That rider will come back as a repeat client, no matter how much cheaper someone else is, if they like you. (Hint: You can pick up riders without an app if you have the proper insurance/permits.)