Uber, Lyft, Sidecar Toe-to-Toe With Insurers State-by-State
The share-and-share-alike attitude considered a virtue by some has become fighting words between ridesharing companies and the insurance industry.
“We try not to make it a battle,” says Robert Passmore, senior director of personal lines for the Property Casualty Insurers Association of America (PCI).
Steering away from giving a winner-loser perspective, he adds: “We’re not against anybody’s business model.”
But it is a battle, and it’s unfolding state-by-state cross the country as PCI, along with a handful of other powerful insurance groups, spends considerable time and resources to make sure personal automobile insurance isn’t footing the bill for ridesharing activities.
The idea of ridesharing has taken off and propelled transportation network companies like Uber, Lyft and Sidecar into an emerging billion-dollar transportation market.
And local and state governments must now figure out how to deal with all of this. Regulation, insurance and safety concerns are among the issues they are grappling with, while angry taxi operators who feel put upon or about to be put out are also coming into play through protests and rancorous political action.
A perceived gap in insurance coverage – between when a TNC’s commercial insurance policy is in effect and when a driver’s personal auto policy will be expected to cover any unplanned incidents – has the insurance industry standing its ground.
The industry’s stance is that TNC drivers are providing a commercial service any time they are logged into a ridesharing smartphone app and looking for a ride. The battle has escalated to the legislative level, with PCI and other large insurers’ groups putting in regular appearances at rulemaking and legislative hearings on ridesharing throughout the nation for more than a year.
TNC operators have agreed in several states to provide $1 million in commercial coverage for whenever a ridesharing driver has a ride. And while TNCs have offered various solutions to deal with the insurance gap, they haven’t agreed to provide the level of commercial coverage insurers have pushed for.
TNCs have argued that requiring $1 million coverage for the period when drivers have their app on but no match will kill their business model, as well as scare off insurance companies currently developing TNC products. They have also accused the taxi and limo industry of stirring things up across the nation to thwart their emerging competition, as is apparent in a statement from Sidecar given in response to a request for comment for this article.
“Established and powerful interests like the taxi industry are threatened and using their political muscle to try and stop or slow services like Sidecar, Lyft and UberX. But people want transportation choice. We hope to continue to work with leaders nationwide to create policies that strike the right balance between protecting public safety and allowing for more consumer choice in the marketplace.”
In a statement from Lyft, the company noted that despite broad publicity over the battles, there has been cooperation between TNCs and some governments and regulators.
“In April, we entered into an operating agreement with the city of Detroit for two years (or until new regulations are introduced), which is a great example of a city seeing the value in community-powered transportation and adapting to allow that model to thrive. While we have faced challenges in certain municipalities, we are hopeful that we can work together with local leaders to come to a permanent solution that puts the people first.”
Uber spokeswoman Eva Behrend said the company is optimistic about finding middle ground.
“We believe there is a solution to be found,” she said. “We think there is a solution, and we do support insurance regulation.”