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House unanimously approves rideshare legislation

Jen Joyce, a community manager for the Uber rideshare service, works on a laptop before a meeting of the Seattle City Council, Monday, March 17, 2014, at City Hall in Seattle. The Council was voting on rules and regulations that have pitted supporters of ride-share and other non-traditional transportation companies against taxi and for-hire drivers and operators. (AP Photo/Ted S. Warren)

. (AP Photo/Ted S. Warren)

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.”




  1. Why are the drivers left out of the discussion? Without us there would be no taxi, livery and limousine and now TNC companies. They are not the ones who receive the tickets or fined.
    We want good clear legislation that we can follow. Definition of insurance is satisfied but there are other issues. HB2135 needs more wotk.

    INSURANCE ENFORCEMENT nice to say insurance must be there. What how is law enforcement going to know if it is there when asked?

    THIRD PARTY BACKGROUND CHECKS Failures of uber background checks are many. Lawsuit is ongoing about false claims of quality. State run background checks such as a fingerprint card is the answer.

    PREARRANGED GROUND TRANSPORTATION The new definition includes pickup & drop off but leave out TIME and RATE. The only thing known in a phone app is the pickup location. Why does this law says the TNC app a prearranged ground transportation? ?

    METERS IN TAXIS According to the law the meter must be used except for prearranged ground transportation. There whole purpose for the meter is to accurately calculate a fair. A phone app will do that too. But if the pickup & drop off AND total fare is negotiated and agreed between passenger/driver it is a true prearranged ground transportation. a meter or app is not needed. This law needs updating to allow all vehicles for hire to use cell phone apps.

    The cost is not bad if these are implemented.
    Commercial licence plate $20. Extra insurance cost for the hybrid policy $20. Drug test $15. State fingerprint card $67 Weights and measures sticker FREE. Drivers cost under $130 to start. Guess the reason why these companies don’t want this is because it would limit their pool of drivers and they have to comp them better to attract more.

  2. I think I will have to agree with the gentlemen’s comments. It does not appear all the
    “stakeholders are participating. The primary stakeholders are the passengers and drivers. Did they participate in these discussions? If not, nothing is settled, heck you may have to start over and bring in the actual people that you represent in Arizona the passengers and drivers. You know the people who pay the taxes to run this state government.
    Which also brings up the subject of taxes. Will each of the other stakeholders be participating in their tax responsibilities for this new industry or will that be left to the stakeholders who didn’t participate as well?

  3. Other than the fact that this bill adds an unnecessary and unquantified expense to the drivers, and no new expenses to the rideshare or taxi companies (imagine that), the real question should be: What moral justification does the government have to insert itself in the middle of a private contract between two individuals (the driver and the passenger)?

  4. What about pre-employment and annual drug testing? AZ law states that all taxi drivers are subject to these tests. I didn’t read anything in the new law about testing Uber or Lyft drivers. Uber has Ducey in their pockets. Uber is planning on moving their global headquarters to Phoenix. Why do you think the governor is so gung ho about making Uber (a company worth 18 billion dollars) happy?

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