Ride-sharing drivers in CA to be subject to insurance minimums

Car Accidents,Our Blog | August 29, 2014

The private transportation industry has undergone something of a dramatic transformation over the last several years thanks to the advent of ride-sharing companies like Uber and Lyft. Gone are the days of arranging a ride in advance or waiting for a taxi company to send a vehicle your way, and in are the days of instantly locating a ride with just a few swipes of your finger.

For those unfamiliar with what ride-sharing companies actually do, they allow prospective fares to arrange rides with drivers in their immediate vicinity via smartphone apps. Here, the drivers are under contract with the ride-sharing company, but use their own vehicles to transport passengers.

While this approach has proven successful from a business standpoint, it has also raised certain concerns regarding public safety.

In particular, state lawmakers have long been concerned that many of the drivers in the ride-sharing industry are lacking the necessary amount of insurance, such that passengers injured — or worse — in car accidents wouldn’t be adequately covered.

In recognition of this danger, Assemblywoman Susan Bonilla (D-Concord) introduced AB 2293, which called for drivers working for ride-sharing companies to carry a set amount of insurance, including $500,000 in excess coverage when they weren’t carrying any passengers.

While the ride-sharing industry was supportive of the move toward requiring drivers to carry more insurance, it took issue with the $500,000 amount, claiming it was simply too high and would serve to stifle innovation.

In recent developments, AB 2293 was passed by the Senate by a 30-4 margin on Wednesday after lawmakers agreed to lower the $500,000 in excess coverage to $200,000.

“The point of this bill is not to stifle innovation but rather to ensure it does not come at the cost of public safety,” said Sen. Holly Mitchell (D-Los Angeles).

In addition to the $200,000 in excess coverage, drivers working for ride-sharing companies will be required to carry a basic policy of $100,000 for damages resulting from a single accident, $50,000 for injuring/killing a single person, and $30,000 for property damage.

For its part, Lyft praised the passage of AB 2293, stating that it will introduce “regulatory clarity for the ridesharing community in California.”

However, there were some lawmakers who felt the compromise of $200,000 was too low, and that drivers should be required to carry the same amount of coverage as limousines, which is currently set at $750,000.

What are your thoughts on this legislation? Does it do enough? Should drivers be required to carry more insurance?

Stay tuned for further developments on this important story …

Those who have been seriously injured or lost a loved one in a car accident caused by the negligence of another should strongly consider speaking with an experienced legal professional to learn more about their rights and their options for pursing justice.

Source: The Fresno Bee, “California sets ride-sharing insurance standards,” Don Thompson, Aug. 27, 2014