Florida Sen. David Simmons, R-Altamonte Springs, is pushing for stronger insurance requirements for transportation network companies that connect drivers with passengers through smartphone apps. According to a recent article in the Herald-Tribune, the Senate Banking and Insurance Committee supported the measure (SB 1298), despite opposition from Uber and Lyft—the two leaders in the burgeoning app-connected industry of for-hire drivers.
The proposed legislation would create the following distinctive coverage requirements:
- the “on call” period from when a driver is notified about a customer to pick up to when the passenger gets in the vehicle—which currently is considered a coverage gap
- when a customer is actually riding in the vehicle—called the ‘ride acceptance’ period
Sen. Simmons believes the proposal is necessary to protect people who may be harmed by ride-service drivers who are on their way to pick up a passenger. In addition, the proposed changes could protect the companies themselves if drivers bypass the app service and notify customers that they are available directly for future rides.
Lobbyists for the transportation network companies, however, dispute the necessity for “on-call” coverage, which they say, will lead to increased fares. Part of the success of Uber and Lyft is a result of traditionally lower fares than standard taxicab company rates.
Currently, these for-hire drivers only need the state minimum of insurance.
Under the proposed legislative bill, the driver or company would be required to carry liability coverage of at least $125,000 for death and bodily injury, at least $50,000 for property damage, and at least $250,000 in uninsured and underinsured motorist coverage. When a passenger is riding in the vehicle, the coverage would jump to at least $1 million for death, bodily injury and property damage, and $1 million in uninsured and underinsured motorist coverage.
Taxi and limousine services, the majority of which are currently controlled by local governments, must carry policies under Florida law that include minimum limits of $125,000 per person for bodily injury, up to $250,000 per incident for bodily injury, and $50,000 for property damage.
The proposal, which still has to clear two additional Senate committees and has not been heard in the House as of yet, comes on the heels of industry requests for the state to clarify insurance requirements in the “for hire” transportation industry.
Click on the link for more information about Florida SB 1298, Insurance for Short-term Rental and Transportation Network Companies.