As a former Californian and insurance regulator in South Carolina, I have watched the recent regulatory discussions regarding ridesharing. I know first-hand the importance of government providing a regulatory framework to protect consumers. However, such a framework needs to allow for growth and innovation.

As governments grapple with innovations and new industries like ridesharing, there is a temptation to force the innovative companies into the old framework designed for different and often times outdated models. Colorado recently took the lead on doing it right and adopting a legislative framework that protects drivers and riders while recognizing the unique nature of the ridesharing model. The California Public Utilities Commission has also recognized this new industry and established regulatory requirements for ridesharing companies to operate in the state.

However, it is quite revealing that the rules proposed by California Insurance Commissioner Dave Jones are contrary to the law he sponsored and which passed in the Assembly, rules that are inconsistent with requirements for other similar activities in California. Behind these efforts is a well-entrenched and powerful opposition group that includes insurance industry lobbyists, Big Taxi conglomerates and trial lawyers. Their objective is nothing less than bullying the ridesharing competition into premature extinction. 

Ridesharing is nothing more than a distinct logistical matching process – cashless, seamless, reliable and convenient. Consumers who need a ride push a button on a smartphone app belonging to a transportation network company and are matched with a driver.

The special interests are lobbing false claims about an “insurance gap” when none such exists. They are using scare tactics on a new service in order to protect their turf and to make more profits for themselves at the expense of drivers and consumers.

I’ve reviewed the coverage plans and there is no insurance gap. The crux of these opponents’ fallacious position is this: Ridesharing drivers rely on two insurance policies to cover their cars. One is the driver’s own personal auto policy designed for private use, the other a business auto policy supplied and paid for by the ridesharing company. Personal policies exclude use of the car for “livery” – transporting people for pay. Business policies cover “livery.” The fallacy of the opposition group’s position rests in the allegation that “livery” starts when the driver steps into his car and opens the app. Ridesharing companies think that is absurd – and I concur.

Here is why: When ridesharing driver X logs in there is no passenger in the car; there might not even be a prospect on the horizon. There is no pending transaction, there is no payment and there has been no service. There is no act of transportation, no livery and no added risk. There is no mutual contractual consent between two parties for the rendering of services. The parties haven’t even matched or met. 


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