What you need to know:
- The California Public Utilities Commission (CPUC) may tighten its insurance regulations for transportation network companies (TNCs) like Uber, Sidecar and Lyft
- Proposed changes include 1) requiring commercial coverage to be in effect when TNC drivers are looking for customers and 2) requiring additional types of coverage for TNC drivers
- The CPUC may vote on the regulations in its August meeting
Insurance requirements for Lyft, Uber and Sidecar drivers may get tighter when the California Public Utilities Commission (CPUC) votes next month on changes to how it regulates the app-based rideshare services. The smartphone-based services — technically called “transportation network companies” (TNCs) — let drivers use their own personal vehicles and smartphones to find and drive passengers in need of a ride.
Taxicab drivers, rideshare drivers and rideshare passengers gave sometimes-heated public comments on the proposed changes at Thursday’s meeting of the CPUC. The public hearing period lasted more than an hour.
Michael Peevy, president of the CPUC, said from the meeting’s outset that a vote wouldn’t take place Thursday but could at the commission’s next meeting in August.
Proposed changes to CPUC regulations include increasing the amount of insurance coverage that TNCs must maintain and requiring that coverage be in effect while the driver has the app open and is waiting for a customer.
CPUC commissioner Catherine Sandoval said the lead-up time to the August vote would allow the CPUC to meet its obligation to “make evidence-based decisions.”
“I think the fundamental question here is: are the newly proposed levels of insurance … well-calibrated to the risk?” she said, referring to proposed changes to regulations that the CPUC released in June.
Peevy said that the CPUC’s initial regulations, issued last September, were California’s “move into a void” of rules for the ridesharing industry.
“We tried to produce an effective regulation that didn’t throttle or kill a nascent industry but also require some safeguards for the public,” he said Thursday. “I think we’ve done that.”
CPUC commissioner Carla Peterman said that the current proposal “will improve the current situation,” but added that the insurance industry lacks the types of coverage that would fully address the gaps in protection that come along with TNCs.
“Our insurance products are not yet evolved for someone who has a personal car and uses it in commercial activities,” she said.
State lawmakers are also grappling with how to regulate the budding industry.
Proposal Beefs Up Insurance Requirements
Currently, the CPUC requires at least $1 million in commercial liability coverage in the event of a crash. The coverage applies to “vehicles and drivers while they are providing TNC services,” according to the CPUC.
The CPUC’s latest proposal not only adds to those insurance requirements — by requiring other types of coverage like medical payments, comprehensive, collision, and uninsured/underinsured motorist coverage — but also requires the commercial policy to be in effect while the driver is waiting for a match.
The CPUC is proposing to break up “TNC services” into three periods that are defined as follows:
Period One: Begins when the TNC app is opened and the TNC driver is waiting for a match
Period Two: Begins when the match is accepted but the passenger isn’t yet picked up
Period Three: Begins when the passenger enters the car and continues until the passenger “safely exits the car”
The current regulations had “made clear that coverage was mandatory during periods two and three.” The latest proposal, according to commissioners, “clarifies that coverage is also mandatory during period one.”
Lawmakers are also creating legislation based on a three-period breakdown of TNC rides in a piece of legislation called AB 2293. The bill passed the state Assembly in May, with amended versions passed out of two Senate committees. Legislators will likely revisit the bill when the session reconvenes in August.
Ridesharers Want Support for Popular Service
CPUC’s Thursday meeting brought a glut of supporters for TNC services, many of them drivers and riders themselves. Wanda Crane, a decades-long resident of San Francisco, said that she switched from the taxi industry to driving for Lyft because the latter was a “dependable, cost-effective service.”
“Drivers want to have insurance. I think this is a wonderful compromise,” she said about the CPUC proposal.
But some other rideshare supporters weren’t very supportive of the new regulations. Rideshare advocate Bryan Barton took to the podium to urge supporters to “fight these regulations.”
“They will destroy this industry,” he said.
Cab Drivers Emphasize Public Safety
Thursday’s CPUC meeting also brought several taxicab drivers and representatives to the public comment portion, where they aired unsavory anecdotes about TNC drivers.
San Francisco cabdriver Barry Taranto told commissioners that “I hate working Friday, Saturday nights,” when more TNC drivers are on the streets looking for fares.
That practice, Taranto said, is technically against current CPUC rules, as TNC vehicles aren’t properly insured to roam streets so that they can be hailed by potential passengers. Taranto also said that Uber and Lyft drivers “sit in pickup zones” that are reserved for taxis and shuttles.
“We do things a lot more safely than they do,” he said.
Another cab driver, Ed Healy, also urged the commission to consider public safety.
“This is one of the principles of insurance: commercial work is more dangerous than personal work,” Healy said. “These TNCs work more of their time during the most dangerous times [on the road].”
Other taxicab representatives challenged the way that TNCs are currently required to be insured, calling it “on-or-off insurance” that leaves worrisome gaps in protection.
Photo courtesy of Raido Kaldma