The two-year battle to legalize ridesharing businesses like Uber and Lyft in Arizona may be picking up steam, as a bill striking a compromise between the taxi and rideshare industries was approved unanimously by the Arizona House on Wednesday.
Republican Rep. Karen Fann’s HB2135, regulating and defining the fledgling but booming rideshare industry, will now head to the Senate.
Although the House and Senate passed legislation to regulate the illegal but booming rideshare industry in Arizona last year, that bill was vetoed by former Gov. Jan Brewer.
Last year, the fight over a bill defining and regulating rideshare companies like Uber and Lyft – which use smartphone applications to connect people looking for a ride with drivers who use their own cars to provide the transportation – pitted the taxi and insurance industries against the rideshare companies in an all-out public relations and lobbying blitz at the Capitol.
But this year, the fight has been much quieter. Fann, of Prescott, said her bill found consensus from everyone involved, including the rideshare companies, taxis industry, insurance representatives, state government agencies involved in the issue – and the new governor.
“I cannot tell you how many multitudes of hours it took us to get here… As of this moment, everyone is in support,” Fann said.
The biggest issue between the bitterly divided stakeholder groups has been the so-called “insurance gap” when drivers have a rideshare app on, but aren’t carrying a passenger.
Fann said the deal struck would cover the insurance gap by requiring insurance policy “riders” be added to personal vehicle insurance policies to cover the insurance gap.
Until Feb. 1, 2016, the cost of that rider will be paid for by the rideshare companies.
After that date, the onus will be on the rideshare drivers to pay for those insurance policy riders.
Once a rideshare driver accepts a request from a passenger, the companies’ full commercial insurance kicks in. Alternatively, if the drivers’ app is turned off, their personal coverage would take over.
Taxi companies with rideshare services would be treated slightly differently under the bill, Fann said.
Because taxi drivers are allowed to do street hails and deal in cash, Fann said they would continue to need full commercial insurance at all times.
The lone exception would be if a taxi company used a rideshare model disallowing street hails and cash payments; under such a scenario, taxi rideshares could use the same personal-rider-commercial combination of insurance policies that rideshares will use under the bill.
Unlike Brewer, Ducey has already signaled that he would sign the bill, should it reach his desk.
Without a legal framework to define and regulate the industry, the state has for years considered them pirate taxis and has ticketed them accordingly.
But in January, the governor told his director of the state Department of Weights and Measures, which regulates taxis, to lay off and stop ticketing the rideshare drivers – sending a clear signal that he wants lawmakers to find a way to legalize the popular businesses.
Total Transit spokesman David Leibowitz said as long as the bill stays pretty much as proposed in the amendment, the taxi company is on board.
“If everyone at the table keeps their word, then I think this has been solved,” he said.
But, “if this gets out of the House and into the Senate and our friends at Uber want to make significant changes, then I think you will see our support dissipate rapidly,” he said.
Though he’s hopeful there won’t be any unwelcome surprises, Leibowitz wouldn’t rule it out: “It’s possible. This is Arizona politics.”