Insurance Commissioner to CPUC: Tech "rideshare" companies must provide insurance

A San Francisco taxi driver raises the Lyft insurance issue during a July 30 protest.
Guardian photo by Josh Wolf

Rideshare companies must provide their drivers with insurance. That was the gist of a public letter released today from the California Insurance Commission, addressed to the California Public Utilities Commission, which regulates transportation network companies such as Uber, Lyft, and Sidecar.

“While smart phone technology is bringing new business opportunities to the marketplace and new transportation choices for consumers, our investigative hearing revealed serious insurance gaps in the current business model of Transportation Network Companies such as Uber, Lyft and Sidecar,” Insurance Commissioner David Jones wrote in a statement to press. “As long as TNCs are encouraging non-professional drivers to use their personal vehicles to drive passengers for a profit, a risk which personal automobile insurance simply does not cover, TNCs should bear the burden of making sure that insurance is provided. Our recommendations will ensure there is insurance protection for passengers, drivers and pedestrians.”

Whether the TNCs should provide insurance has been the subject of intense debate in state and local governments over the past year. The recommendations to the CPUC come specifically out of a hearing on TNC insurance that Dave Jones, the insurance commissioner, held March 21. The Guardian also wrote an editorial, "Sharing economy should share its wealth," calling for rideshares to provide insurance, not only because it's unfair competition (insurance costs money to provide, a burden taxi companies carry but not TNCs), but because people and TNC drivers in accidents were left for broke, lacking inadequate insurance

A taxi driver-led protest calling for the CPUC to require TNC companies to provide insurance is starting at noon, today. Below we'll embed the insurance commissioner's letter to the CPUC. 

[Update 4/10: Visit our story on the taxi driver-led protest, here.]



Insurance Commissioner Rideshare recommendations to California Public Utilities Commission on Lyft, Sidecar... by FitztheReporter


than have some bare bones minimum coverage as it typically prescribed by law

Posted by Guest on Apr. 09, 2014 @ 1:28 pm

The state government has responded relatively quickly to the situation. This is a reasonable recommendation. I'm also surprised that the private insurance industry hasn't responded by offering supplemental coverage for individuals that participate in ride-sharing.

As far as the cab companies go however, I have little sympathy for them. The lack of available cabs has been in issue in the city for decades. The cartel hasn't been responsive to the needs of their customers. Now they're upset because they're getting competition. Using Uber to get a licensed cab is a much improved experience. If all we get from this "disruption" is a cab service better suited to the needs of consumers, then Uber and Lyft will have done their job.

Nobody should expect to provide a good or service, without ever improving it, and expect to stay in business.

Posted by robco on Apr. 09, 2014 @ 2:17 pm

I'd still rather have the option of paying less and having less insurance

As it is, I might have to offer my neighbor twenty bucks to drive me to the airport

Posted by Guest on Apr. 09, 2014 @ 2:21 pm

I would agree. If you give your friend $20 in cash and they drive you to the airport and they get into an accident, their insurance will cover them and damage they may have caused. That isn't the case with Uber and Lyft. So there is a problem with UberX and Lyft in that regard. Drivers either need to carry their own insurance to cover them, or the ride sharing companies need to step up and offer it. The requirement to for auto insurance is liability - you need to be prepared to cover the cost of the damage for which you are liable. Comprehensive insurance is not required by law.

Posted by robco on Apr. 09, 2014 @ 3:56 pm

That won't get you very far on Uber and Lyft, even without insurance!

That aside, I find the whole concept kind of weird. If a friend asks me to drive them to the airport, I do it for free. If I charge them $50 bucks, which is what a cab costs, then I'm not much of a friend. I'm more like... a taxi! If I charge them $45 but without insurance, which is what Uber charges, then I'm a gypsy cab without insurance.

Now you may assert your "right" to save $5 and put your life into your own hands, and normally I'm all for that. But what about my right as a fellow user of the road who might get hit by the Uber driver speeding to take you to the airport, only to find out that his insurance refuses to pay once they realize he was using his car as a business?

Posted by Greg on Apr. 09, 2014 @ 4:28 pm

And I want him to feel good about it so I give him $20.

So yes, I want a choice:

1) A regular cab, $60, lots of protections that I may or may not want or need

2) Uber, $40 with some protections

3) My neighbor, $20, no protections

You see, consumer choice!

Posted by Guest on Apr. 09, 2014 @ 4:42 pm

as Uber. But the point is that I dont care because it is a risk i am happy with

So let me take risks if i want to

Posted by Guest on Apr. 09, 2014 @ 4:31 pm

He is not the same as Uber. The Uber guy does it as a business. Your friend does it every now and then. If you want to argue that's a distinction without a difference, take it up with the insurance policy when they refuse to pay. It's their distinction, not mine.

Posted by Greg on Apr. 09, 2014 @ 8:41 pm

for offering a ride until he becomes, in your opinion, a "professional"?

Once a month? A week?

Posted by Guest on Apr. 10, 2014 @ 7:20 am

Again, their distinction. Not mine. They're the ones who won't pay if they find out that you were using your car for business purposes.

Posted by Greg on Apr. 10, 2014 @ 12:30 pm

are you making out like this is an issue?

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Posted by pure garcinia cambogia reviews yahoo on Jul. 19, 2014 @ 2:40 pm

Insurance doesn't exist just for you. YOU might be willing to risk riding with a driver who has no insurance, but if that driver hits somebody, that person they hit didn't make the choice to get hit by a driver with no insurance. That's the difference.

Posted by bassguitarhero on Apr. 14, 2014 @ 2:11 pm

But the driver would have hit that third party regardless of whether I was in the car.

Posted by Guest on Apr. 15, 2014 @ 7:17 am

They arose because taxi service in SF sucked and still sucks. Until the taxi companies are willing to move into the 21st century they will continue to lose business to companies like Uber and Lyft.

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You cannot have both private and commercial insurance on the same vehicle. You have to have one or the other.

Posted by Guest on Apr. 09, 2014 @ 4:37 pm

Have you taken taxi lately??? Much better in many aspects. At they have a camera for your safety and $1 million coverage. You can hail a cab using flywheel also. Cab drivers pay fees to sf. True community drivers. None of these tnc drivers pay a dime to sf revenues and they are contesting our roads.

Posted by Guest on Apr. 09, 2014 @ 6:49 pm

But the only way was up. The cars could be nicer - that's for sure.

Posted by Guest on Apr. 09, 2014 @ 7:35 pm

This will help prices go back up in the right direction to the benefit of the drivers....TNC free lunch may be ending

Posted by Guest on Apr. 09, 2014 @ 7:53 pm

I work as a Realtor (I try not to be the evil, bloodsucking kind--I usually work with little old ladies who are selling their homes ). In the few times a year I take buyer clients to look at properties, I do it in my car, for which I pay an extra $400/year on my auto insurance policy. Yes, I hate paying it, but I see it as a cost of doing business and God forbid if I'm in a car wreck, I won't loose everything I own.

What I'm trying to say is that carrying adequate car insurance for your paying passenger is a necessary cost of doing business. If you can't afford it, then you need to be in another line of work.

Posted by Charlie on Apr. 10, 2014 @ 5:09 am

realtor who is cheaper and I carry my own insurance. Or risk not having any.

Posted by Guest on Apr. 10, 2014 @ 7:21 am

All that uber and lyft has to do is hire drivers that present adequate proof of commercial insurance. This entire ordeal us the big "look the other way" scam for all working parties involved in rideshares. The company pretends that having personal insurance is okay because they have their added coverage (which will never kick in of course) and the driver plays along because they either don't realize the reality of the situation they are in, or they are just willing to take the risk to make quick money. I work for a restaurant delivery service as an independent contractor in a set-up similar to these rideshares. I finally got commercial insurance because I saw time after time accidents occur and that magic company liability insurance never kicking in. The scam is that by just having a liability plan it gives you the ability to hire drivers with only personal insurance policies. If this isn't the case, nobody works for these companies because the cost of insurance would be too high for most of the drivers to turn a profit. If the company insurance was legit, their would be no issues because people would know that the ride shares pay-out their victims, which they do not. If you want a real rideshare, just carpool. Uber and Lyft are just dispatch companies that use a bunch of, basically, independent contractors, and make a grip of money off them.

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