Get SF Weekly Newsletters

Wednesday, August 27, 2014

Uber and Lyft Withdraw Opposition to State Insurance Bill (Update)

Posted By on Wed, Aug 27, 2014 at 2:19 PM

  • Photo illustration by Audrey Fukuman
Update, 2:54 p.m.: Uber and Lyft have withdrawn their opposition to AB2293, according to a spokesman from Assemblymember Susan Bonilla's office.  Uber spokeswoman Eva Behrend released this statement:

“Californians loves Uber and lawmakers have heard them loud and clear. Common sense has prevailed and the winners are Californians."

Lyft, in turn, released its own statement: "We have agreed to a compromise that provides clarity for the ridesharing community in California. However, a truly permanent solution must include the creation of modern insurance products tailored for drivers who participate in peer-to-peer transportation."

Original story:

A hotly disputed assembly bill that would make Uber, Lyft, and their drivers pony up for commercial insurance might soon be headed to the governor's desk, even though both companies have fought tooth and nail to kill it. 

Assembly Bill 2293 — written by Assemblywoman Susan Bonilla (D-Contra Costa and Solano Counties) — was amended late last night to stipulate that all transportation network companies (or TNCs, meaning companies that provide pre-arranged rides via an app) carry hefty insurance policies that don't leave any coverage gap for their contracted drivers.

The new policies match numbers that Uber and Lyft brass called for in mid-June. They'll provide at least $50,000 for death and injury per person, $100,000 for death and injury per accident, and $30,000 per incident for property damage. Companies will also have to provide at least $200,000 in excess liability coverage, and $1 million in uninsured motorist coverage that kicks in the moment a passenger enters the vehicle.

Up until now, Uber, Lyft, and their ilk carried $1 million excess liability policies in accordance with rules set last year by the California Public Utilities Commission, but it wasn't clear whether those policies would actually cover accidents. Uber has largely absolved itself of responsibility for accidents caused by its chartered town car drivers; those caused by civilians who drive for its sedan service, UberX, present a dicier issue.

Under the current rules, TNC drivers are left to fend for themselves — and many of them don't know that. If an UberX driver gets in an accident, he or she will call his personal insurance carrier, who will in turn decide whether to process or deny the claim. Often, the carrier won't know that the driver was using his car for commercial purposes, which can't legally be covered by personal insurance policies. That puts an unfair burden on insurance companies, and an even worse burden on consumers.

Representatives of the insurance industry, whose members supported AB 2293, say that because UberX, Lyft, and other TNC drivers are putting their personal insurance on the line, their risk is getting spread over all California drivers. That means if accidents increase because more people are driving for TNCs, then everyone else's rates will go up, too. In essence, the public might have to subsidize these obscenely wealthy companies. 

That's a scary thought, one that Uber doesn't want voters to be pondering. In campaign e-mail blasts, it presents itself as a scrappy innovator going up against insurance companies, trial lawyers, and the "big taxi cartel." In reality, it's an $18.2 billion venture-funded startup with a vast web of lobbyist connections in the capital. 

AB 2293 was sent back to the Senate Rules Committee yesterday; from there it will be re-referred to the Senate floor. It could go up for a vote tomorrow, or more likely Friday.

  • Pin It

Tags: , , , , ,

About The Author

Rachel Swan

Rachel Swan

Rachel Swan was a staff writer at SF Weekly from 2013 to 2015. In previous lives she was a music editor, IP hack, and tutor of Cal athletes.


Showing 1-1 of 1


Comments are closed.

Popular Stories

  1. Most Popular Stories
  2. Stories You Missed

Like us on Facebook


  • clipping at Brava Theater Sept. 11
    Sub Pop recording artists 'clipping.' brought their brand of noise-driven experimental hip hop to the closing night of 2016's San Francisco Electronic Music Fest this past Sunday. The packed Brava Theater hosted an initially seated crowd that ended the night jumping and dancing against the front of the stage. The trio performed a set focused on their recently released Sci-Fi Horror concept album, 'Splendor & Misery', then delved into their dancier and more aggressive back catalogue, and recent single 'Wriggle'. Opening performances included local experimental electronic duo 'Tujurikkuja' and computer music artist 'Madalyn Merkey.'"