The Journal Gazette
Friday, April 18, 2014 2:57 pm

Senate to debate rideshare regulations

PHOENIX (AP) Among the major issues left to cover at the Arizona Legislature before the session ends is how to regulate the increasingly popular ridesharing programs like Uber and Lyft.

The contentious debate has pitted traditional taxi companies against the new tech startups that use mobile apps to connect drivers with customers looking for a ride.

The Senate on Monday is expected to debate a bill that aims to regulate Uber and others. The bill is opposed by those who say it does not hold ridesharing companies to the same standards required of traditional taxi and limo operations.

Meanwhile, Uber and Lyft have launched an aggressive social media campaign urging users to support the legislation by Sen. Al Melvin, R-Tucson.

A Melvin amendment to House Bill 2262 would require ridesharing programs to provide a minimum $1 million insurance coverage for drivers and to conduct a criminal background and driver's license checks. It would also require cars driven by Uber employees to be inspected annually.

But the bill would exempt Uber from regulations that apply to taxi drivers and would prohibit cities, counties and towns from enacting their own regulations. The amendment does not require the companies to provide insurance coverage at all times that a driver is on the job, as many in the insurance and tax company industry believe they should.

Sen. Bob Worsley, R-Mesa, supports regulating ridesharing companies and said the bill was pulled from consideration this week because the changes that Gov. Jan Brewer's office wanted to see in insurance coverage and drug testing for drivers were not ready.

"I'm a big believer in innovation and sometimes disruptive innovation comes in and really changes things and makes things more convenient and cheaper," Worsley said Friday. "So I'm supportive if we can get through safety issues and make sure drivers aren't under the influence, aren't drug users, and that insurance is in place so that people are covered if there's an accident. It's that simple."

Mike Pinckard, president of Total Transit, a parent company of Discount Cab, says the issue is a matter of public safety.

"We're going to survive no matter what happens, but there are a lot of small independent operators who make their living following the rules, following the law, protecting the public like they're supposed to. And somehow we're going to make them pay?"

Pinckard and a group of insurance and banking industry leaders have worked with Sen. John McComish, R-Ahwatukee, to propose an amendment that would require rideshare companies to provide insurance coverage at all times that a driver is on the job but would give the companies different options as to how to purchase that insurance. The amendment would require Uber to conduct drug tests and criminal and driver's license background checks.

Uber currently insures drivers with $1 million policies, but only from the time the driver accepts a pickup to the time the driver drops off the passenger.

That means a driver who is working on the road but has not yet received a request for a ride is not insured by the company unless the driver's personal insurance denies the claim, in which case Uber provides its contingent policy. The issue became especially heated nationwide after a 6-year-old girl was killed in a crosswalk by a driver logged into the Uber app in San Francisco on New Year's Eve. The girl's family contends that Uber is financially responsible because the driver was waiting for customers. Uber says it isn't liable because no passengers were in the car.

Uber opposes the McComish amendment.

"The McComish amendment was a back room rush job, void of any industry or public input. It destroys thousands of entrepreneurial jobs in Arizona, slashes income opportunities for Arizona's rideshare drivers, limits consumer choice and effectively shuts down uberX in our state," spokeswoman Lane Kasselman said.

UberX is the lower-cost option of Uber that is offered in Phoenix.

However, another amendment being offered by Sen. Kelli Ward, R-Lake Havasu City, would exempt rideshare companies from the commercial insurance requirement that affects traditional taxi, limo and livery companies. It also would not require rideshare drivers be drug tested.

Insurance, banking and traditional cab companies support the McComish amendment and oppose both the original Melvin amendment and the Ward one.

McComish said on Friday that he doesn't think the Senate and the governor would support the Melvin and Ward amendments.

"They're saying, 'We're special and we shouldn't be subjected to the same regulations,'" McComish said. "I don't think the legislators are gonna buy that."

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