Across the nation, states and cities are grappling with how best to deal with so-called “ride share” companies like UberX and Lyft. In places like Portland, Miami and New Orleans, the solution has been to ban these multi-billion-dollar start-ups from entering the marketplace. Cities like Seattle and Minneapolis have drastically restricted the number of “ride share” vehicles allowed to compete for fares.
Here in Arizona, we believe there’s a better idea – one that’s far more fair and better aligned with our state’s commitment to open competition and a level playing field in the marketplace. The for-hire vehicle industry, which has operated here in Arizona for decades under simple but highly effective standards designed to keep riders safe, proposes that UberX, Lyft and other “ride sharers” meet the same modest set of safety standards.
What does that mean? Only that these multi-national corporations protect Arizonans with the same set of insurance and safety standards as all other for-hire transportation providers. That makes sense, given that these companies, like ours and all for-hire transportation companies, fill the exact same niche – we all transport people from Point A to Point B in return for a fee.
As you know, UberX and Lyft have other ideas, which they’ve encapsulated into House Bill 2262. Their measure would allow UberX and Lyft to make their own rules – including avoiding the commercial insurance requirement that all for-hire vehicles have successfully operated under for years. Why does that matter? Because this special exemption will put Arizona passengers, drivers and the general public at risk and ultimately increase your insurance premiums.
Currently, every for-hire vehicle in the state, by law, must carry at least $300,000 of primary commercial insurance on every vehicle. At Total Transit, we go much further, upping that coverage to $1 million worth of primary commercial liability insurance on every vehicle. This legally required insurance covers any accident the vehicle may be involved in, regardless of the time of day, what the vehicle was being used for and who was on board.
How much primary commercial liability insurance do UberX and Lyft carry on their vehicles? None. Not a penny. And that’s exactly how they like it, as evidenced by HB2262.
Instead, UberX and Lyft prefer a far less expensive – and less safe – contingency policy. This contingency insurance is not on their vehicles; instead coverage is contingent on the circumstances of an accident, such as whether a passenger was onboard or whether the driver was logged into the ride share app.
Contingency policies leave consumers facing costly lawsuits in the event of a claim – or ending up at the mercy of insurance companies who may use policy loopholes to escape liability. One case in point: The killing of a 6-year-old San Francisco girl by an UberX driver this past New Year’s Eve. UberX originally denied all responsibility in this fatality, which also injured two pedestrians. That case is in court, where it’s destined to stay for years. The cost of these tragedies and the resulting swarm of litigation nationwide ultimately will be paid for by all of us in the form of increased insurance premiums.
Arizona’s open markets coupled with our modest regulatory structure provide the best opportunity nationally to define how all for-hire transportation services can coexist in a safe, efficient, competitive fashion. Let’s hope our lawmakers take advantage of this opportunity by defeating unsafe and protectionist legislation like HB 2262 and instead setting an example for the rest of the country.
–Mike Pinckard is president of Total Transit, the parent company of Discount Cab.