New Uber, Lyft, Sidecar insurance rules signed into law by Gov. Jerry Brown

By Josh Richman jrichman@bayareanewsgroup.com Posted: 09/17/2014 03:42:11 PM PDT1 Comment

FILE - In this Jan. 17, 2013, file photo, a Lyft car crosses Market Street in San Francisco. (Jeff Chiu/AP Photo)

SACRAMENTO -- Online ride-sharing companies will provide more insurance for drivers under a law signed Wednesday by Gov. Jerry Brown, capping a year of intense wrangling between the nascent industry and lawmakers.

A deal was struck just before the end of the Legislature's session last month on AB2293 by Assemblywoman Susan Bonilla, D-Concord. She issued a statement Wednesday saying it protects consumers but also "represents much more than that."

"This measure symbolizes business flexibility, consumer affordability, political compromise and, most importantly, what true public policy should be -- a collective process for all stakeholders to contribute," Bonilla said.

Ride-sharing companies like Uber, Sidecar and Lyft connect passengers and drivers through smartphone apps, but it's not sharing

in the casual carpool sense: The passengers pay the drivers, who are considered independent contractors.

The new law will let insurers create new commercial policies for the fast-growing industry, and it specifies that personal policies no longer will cover the drivers' commercial activity starting next July.

From the moment a driver turns on the company's smartphone app, the company must provide $50,000 in liability coverage for death or injury to a single person; $100,000 in coverage for all damages in a single accident; and $30,000 for property damage. In addition, $200,000 of excess liability coverage is required when the driver's personal policy is insufficient. The company then must provide $1 million in coverage once the driver is matched with a passenger.

An earlier version of the bill required up to $750,000 insurance from the moment the app is turned on. The ride-sharing companies had fought back, arguing that's far more than what's required of taxis -- and for a time in which drivers aren't even on the clock yet.

Armand Feliciano, vice president of the Association of California Insurance Companies, issued a statement Wednesday praising the new law.

"Once again California is leading the way in forging public policy to meet the needs of new innovations," he said, adding that Bonilla and Brown "brought stakeholders together and were able to reach a middle ground that most of the parties, including Uber and Lyft, could support."The state Senate passed the bill on a 30-4 vote, and the Assembly passed it 67-0.

Josh Richman covers politics. Follow him at Twitter.com/Josh_Richman. Read the Political Blotter at IBAbuzz.com/politics.

Ride Serives decimate S.F Taxi Industry's business

Ride Services decimate S.F Taxi business

Ride services decimate S.F. taxi industry's business

Brant Ward/San Francisco Chronicle

Yellow Cab driver John Lyman emerges from his car on California Street Tuesday August 5, 2014 in San Francisco, Calif. Yellow Cab taxi driver John Lyman uses an application called Taxi Magic, which will soon be called Curb, to get more fares in an effort to compete with on-demand services like Uber and Lyft. Photo: Brant Ward, San Francisco Chronicle

The fall of the taxi industry in San Francisco, as less-regulated ride services have taken hold, has been both steep and sharp. The number of trips taken by taxi plummeted 65 percent in just 15 months, according to a report presented to the San Francisco Municipal Transportation Agency board Tuesday.

It's been evident that the booming popularity of app-dispatched ride services like Lyft and Uber have dramatically eaten into the taxi industry's business. But the report on the status of the taxi industry reveals the depth of the impact.

The average number of trips per taxi has been on a steady slide - from 1,424 per month in March 2012 to 504 this July.

The new ride services "have dramatically changed the for-hire transportation industry in San Francisco," said Kate Toran, the city's new taxis and accessible services director.
While the MTA regulates the taxi industry, the state Public Utilities Commission has claimed jurisdiction over the new ride services, which typically contract with people to use their personal cars to carry passengers who hail them with a smartphone app.

The new companies, unlike taxi operators, have lesser insurance requirements, no restrictions on the number of vehicles they put on the streets, no clean-air standards and less-stringent background checks. The newcomers say they're replacing a failed industry, while the taxi companies claim they're underregulated scofflaws.

Among biggest impacts of the ride services has been the drop in taxi rides taken by people in ramp taxis, which carry people in wheelchairs. As the ride services have grown and the number of cabs has diminished, so has the availability of wheelchair-accessible taxis, which are costlier to operate. The number of pickups in ramp taxis dropped from a high of 1,378 in March 2013 to just 768 in July. The ride services are not required to pick up people in wheelchairs. MTA officials have offered incentives to cab companies to keep more ramp taxis on the road.
The agency has already taken steps to keep taxis part of the city's transportation landscape by reducing or eliminating fees and streamlining regulations. They've also required electronic information systems in all cabs and encouraged the use of dispatching apps. Most cabs now use electronic hailing apps similar to what the ride services offer.

But MTA directors and some taxi drivers and managers said more is needed. Director Malcolm Heinicke wants to make it mandatory for taxis to have e-hailing apps, and taxi drivers said they want the city to keep ride services and limousines out of transit-only lanes and taxi stands.

Michael Cabanatuan is a San Francisco Chronicle staff writer. E-mail: mcabanatuan@sfchronicle.com Twitter: @ctuan