California Commissioner Likes Proposed Rideshare Regulations

Published June 12, 2014

California Insurance Commissioner Dave Jones on Thursday gave a thumbs up to regulations proposed by California Public Utility Commission President Michael Peevey, which seeks broader commercial insurance coverage for drivers who use  smartphone ridesharing apps from operators like Uber, Lyft and Sidecar.

The regulations proposed Tuesday further define ridesharing operators – transportation network companies – and ridesharing activities and requires a $1 million commercial liability policy to be in place whenever a TNC driver has a smartphone app turned on to accept rides.

“I applaud President Peevey’s proposed decision to make sure that Transportation Network Companies (TNC) like Uber, Lyft and Sidecar maintain $1 million in primary liability insurance that begins the moment drivers switch on the application,” Jones said in a statement. “Personal auto insurance is not available to cover TNC drivers, their passengers, pedestrians or other drivers they might run into. Unless the TNCs are required to provide insurance, drivers, passengers and pedestrians will be left without adequate protection. This proposed decision ensures that they are protected with liability insurance from the moment a driver switches on the application which connects drivers and riders.”

Jones has already recommended that CPUC require TNCs to provide $1 million in primary liability insurance from the moment an app is switched on and also to make sure that optional coverages the driver had purchased on his or her personal automobile policy – medical payments, comprehensive and collision, or uninsured or underinsured motorist – are matched by a TNCs insurance when driver’s uses their personal vehicle to transport passengers for money.

CPUC last year issued regulations defining TNCs, but it didn’t address a gap in insurance coverage between when a TNC’s commercial insurance is in play and when driver’s would be relying on their personal auto policies for coverage. That gap – when a ridesharing driver has an app on but isn’t on the way to get a ride or doesn’t have a ride – has caused consternation for the insurance industry.

Uber issued a statement late Wednesday vowing to battle the decision.

“This proposed decision protects trial lawyers, insurance companies, and big taxi – ignoring the needs of hardworking Californians. Uber will vigorously defend the rights of California riders and drivers to enjoy the competition, choice, reliability and safety that ridesharing affords the Golden State.  At a time when California desperately needs job creation initiatives rather than industry destroying bureaucracy, we look to the leaders of our state to ensure that the innovation economy doesn’t crumble at the hands of special interests.”

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One thought on “California Commissioner Likes Proposed Rideshare Regulations

  1. I propose a class action lawsuit against uber lyft and sidecar for making everyone else insurance rates go up.

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