A compromise reached between California legislators and ride-share companies Uber and Lyft this week suggests that insurance companies may be asked to create a new type of policy specifically for peer-to-peer ride-sharing.
As we noted briefly at the end of last week, representatives of Uber and Lyft were making noise in the press and getting bratty in Sacramento with possible threats of moving their businesses out of the state in the face of AB 2293, proposed by Assemblywoman Susan Bonilla (D- Concord). The bill originally proposed requiring commercial insurance policies for all ride-share drivers, saying that personal insurance policies could not be expected to cover damages that occurred while being a car-for-hire. The bill that is now moving forward, having passed a Senate vote on Wednesday, still creates such a "firewall" between commercial use and personal insurance policies, as the powerful insurance lobby hoped, but it lowers the amount of "excess" liability coverage that Uber and Lyft will need to have their drivers carry. After compromises, Uber and Lyft now support the bill as written.
As the Business Times reports:
The compromise announced Wednesday, which got approval from Governor Brown's office, would require $50,000 per individual and $100,000 total primary liability coverage during periods in which drivers are logged on but not handling service calls, as well as $30,000 in property damage.
... [Also] One key to getting Lyft's blessing was an amendment that came Tuesday night that lowered the amount of excess liability coverage that Lyft and Uber must have to have from 500,000 to $200,000.
Bonilla said she hoped to remove the ambiguity that occurred after that tragic accident on New Year's Eve involving UberX driver Syed Muzzafar, who struck and killed six-year-old Sofia Liu. Uber tried to avoid liability in the case by saying both that Muzzafar was an independent contractor and not an employee, and that he was not transporting a passenger and therefore technically not driving for them at the time of accident.
A spokesperson for Uber said yesterday, "Common sense has prevailed and the winners are Californians."