Members of the House Transportation & Energy Committee, considering a bill to authorize on-demand ride-sharing services, grilled sponsors Wednesday about potential gaps in insurance coverage, discrimination against passengers, workers’ compensation and other concerns.
At the start of the packed hearing, committee chairman Rep. Max Tyler, D-Lakewood, said action on Senate Bill 125 would be laid over until next week.
Despite several meetings in recent weeks, Tyler said stakeholders still aren’t on the same page.
The first question from lawmakers Wednesday addressed a concern that has dogged SB 125 since it was introduced. Rep. Pete Lee, D-Colorado Springs, asked whether sponsors have received assurances from insurers that they would cover drivers during any gray areas, when commercial coverage from ride-sharing companies has not yet kicked in.
“The insurance companies have not given me any assurances on anything,” said Rep. Libby Szabo, R-Arvada.
Ride-sharing companies such as UberX and Lyft connect riders and drivers via a smartphone app. Drivers use their personal cars for what is often a part-time job.
The insurance industry reiterated this week that it would be forced to raise rates on auto policies statewide if insurers are required to cover ride-sharing drivers under their personal coverage. Insurers are insisting that lawmakers make drivers carry commercial coverage.
“We have no way of knowing how much rates will go up,” Colorado Division of Insurance official Bobbie Baca testified Wednesday. “But we do believe they will.”
Jack Finlaw, Gov. John Hickenlooper’s chief legal counsel, testified that the best option may be to delegate the insurance issue to the Public Utilities Commission.
It’s important that the bill pass, Finlaw said, because UberX and Lyft are currently operating illegally in the state.
“We think this will authorize an important new transportation opportunity,” he said.
SB 125 would classify UberX and Lyft as transportation network companies, or TNCs, and place them under limited oversight of the PUC, which regulates cab firms.
Lawmakers raised several concerns about requirements placed on taxi companies, but not on TNCs , such as mandates to provide wheelchair-accessible vehicles.
But perhaps the biggest question mark relates to insurance coverage. UberX and Lyft offer liability coverage once a driver and a passenger have connected. Both companies recently updated their policies to provide coverage also when a driver is on the clock but doesn’t yet have a fare, though the measure doesn’t mandate that.
This time frame is key because insurers say personal policies are invalid as soon as drivers turn on the UberX or Lyft app, through a livery exclusion.
But SB 125, as written, draws insurance industry opposition because it declares that livery service doesn’t start until the driver is “engaged in a prearranged ride.”
