Amendments made to a California bill that would require minimum insurance standards for ridesharing have eased opposition from companies like Lyft and Uber which, for the past year, have been waging war with state lawmakers on the issue.
Insurance requirements for ridesharing have remained a heated issue for taxicab companies, which can pay upwards of $1 million in insurance premiums per year. They argue that companies like Uber and Lyft sidestep expensive insurance liabilities for their drivers by allowing them to drive using only their personal insurance.
“Right now, there is no rule,” says Armand Feliciano, vice president of the Association of California Insurance Companies (ACIC). “So we said, 'Okay, we're going to make a new commercial standard for you.' When the app is on, it's akin to turning that light on.'”
ACIC worked with state lawmakers, including the bill's author, Assemblywoman Susan Bonilla, to require that ridesharing companies carry at least $300,000 worth of insurance coverage, making the final change to the law last week. Still, that total is just under half a million less than what's required of limousines and a quarter of what's required for taxicabs in some jurisdictions of California, according to ACIC.
“We worked closely with the administration to create that number,” says Feliciano, who also commends Bonilla for taking a hardline stance on an issue that has dominated California headlines.
But even though there has been unilateral agreement within the ridesharing community, there is still debate on how the insurance industry should modernize to meet the substantially increased demand for companies like Uber and Lyft.
“We have agreed to a compromise that provides clarity for the ridesharing community in California,” Chelsea Wilson, a Lyft spokeswoman, tells PC360. “However, a truly permanent solution must include the creation of modern insurance products tailored for drivers who participate in peer-to-peer transportation.”
Wilson says that innovation in the insurance marketplace will be the determining factor in setting safety standards without hampering the growth of rideshares.
The bill, AB 2293, is being debated on the floor today and, if approved, will go to Gov. Jerry Brown's desk for signing.
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