# Transportation network company (TNC)

> A transportation network company is the legal name for a rideshare company such as Uber or Lyft. Why the label matters for insurance after a crash.

Canonical page: https://accidentclaimfacts.com/glossary/transportation-network-company/  
Last reviewed: October 29, 2026 by the Accident Claim Facts editorial team  
General information, not legal advice. Talk to a licensed attorney in your state.

## Quick answer

A transportation network company, or TNC, is the term state laws use for a rideshare company, such as Uber or Lyft, that uses an app to connect riders with drivers who use their own cars. The label matters because TNC laws set special insurance rules for these drivers.

## In a car accident claim

Which insurance applies to a rideshare crash depends on what the driver was doing in the app at the time. State TNC laws usually split this into periods: app off, app on and waiting for a request, and from accepting a ride until it ends.

The coverage rises with each stage. In Texas, liability coverage of $1,000,000 per incident must be in place while the driver is on a prearranged ride. In California, while a driver is logged on and waiting, the minimum is $50,000 per person and $100,000 per incident for injuries, plus $30,000 for property damage.

The driver's personal policy may not help: in Texas, a personal auto policy may exclude any loss while the driver is logged on to a rideshare app or engaged in a prearranged ride. That is why the driver's app status is often the first question. Texas law also says that after a collision, the driver must tell the people involved, their insurers and the police, on request, whether they were logged on to the app or on a prearranged ride. The guide to [rideshare accidents](https://accidentclaimfacts.com/accidents/rideshare-accidents/) explains each period, passengers' coverage and how claims are made.

## Example

> **Example:** A rideshare driver with a passenger in the back runs a red light and hits another car. Because the driver was on a prearranged ride, the TNC's higher liability coverage applies to the injured passenger and the other driver, not just the rideshare driver's personal policy.

## Related terms

- [Policy limits](https://accidentclaimfacts.com/glossary/policy-limits/)
- [Uninsured motorist coverage](https://accidentclaimfacts.com/glossary/uninsured-motorist-coverage/)
- [Bodily injury liability](https://accidentclaimfacts.com/glossary/bodily-injury-liability/)
- [Independent contractor](https://accidentclaimfacts.com/glossary/independent-contractor/)

## FAQ

### Is Uber a transportation network company?

Yes. Uber and Lyft are the best-known examples of companies that state laws call transportation network companies.

### What if the rideshare driver had the app off?

Then the crash is generally treated like any other: the driver's own auto policy is the main coverage, and the TNC's insurance usually does not apply.

## Sources

- [Texas Legislature, Insurance Code chapter 1954](https://statutes.capitol.texas.gov/Docs/IN/htm/IN.1954.htm) — rideshare coverage, app status disclosure and personal policy exclusions
- [Texas Legislature, Insurance Code § 1954.053](https://statutes.capitol.texas.gov/Docs/IN/htm/IN.1954.htm#1954.053), checked October 29, 2026
- [California Legislature, Public Utilities Code § 5433(c)(1)](https://law.justia.com/codes/california/code-puc/division-2/chapter-8/article-7/section-5433/), checked October 29, 2026
- [Texas Legislature, Insurance Code § 1954.151(a)](https://statutes.capitol.texas.gov/Docs/IN/htm/IN.1954.htm#1954.151), checked October 29, 2026
- [Texas Legislature, Insurance Code § 1954.056(b)](https://statutes.capitol.texas.gov/Docs/IN/htm/IN.1954.htm#1954.056), checked October 29, 2026