California could soon require more stringent insurance coverage for ridesharing services, rules set up to protect riders and clarify liability in the case of any accidents. A new proposal from The California Public Utilities Commission (CPUC) filed today would require $1 million primary commercial liability insurance that starts precisely when a for-hire driver launches apps from companies like Uber, Lyft, and others. That's instead of when a driver sets off for, and during the entirety of the ride, and goes beyond current insurance mandates that rely on a drivers own insurance.
The CPUC's plan also asks for medical payment coverage to reach $5,000, comprehensive and collision coverage to be $50,000, and $1 million per incident for uninsured/underinsured motorist coverage, The San Francisco Chronicle reports. That requirement, and the proposed change on liability are set for a city meeting on July 10th.
Uber's Eva Behrend came out against the decision in a statement, saying:
"This proposed decision protects trial lawyers, insurance companies, and big taxi — ignoring the needs of hardworking Californians. Uber will vigorously defend the rights of California riders and drivers to enjoy the competition, choice, reliability and safety that ridesharing affords the Golden State. At a time when California desperately needs job creation initiatives rather than industry destroying bureaucracy, we look to the leaders of our state to ensure that the innovation economy doesn't crumble at the hands of special interests."
Builds on last year's new rules
Last year, California became the first state to mandate new regulations for ridesharing apps. The state that asked for things like criminal background checks on drivers, a zero-tolerance policies on drugs and alcohol, driver training programs, and perhaps most importantly — commercial liability insurance up to $1 million. Since then, incidents like the UberX driver who killed a 6-year-old on New Year's Eve, have highlighted the need for clearer rules on liability insurance.
The proposals come as companies like Uber, Lyft, and Sidecar are growing. Uber in particular announced a new round of $1.2 billion in funding just last week, an investment that puts its value at $17 billion. Lyft, another transportation service that offers ridesharing and hires its own network of drivers, raised $250 million in April, and just moved into a larger San Francisco headquarters to keep up with its growing headcount.
Update June 10th, 10:50PM: This story has been updated with a statement from Uber.