Uber, Lyft compromise on ridesharing regulations

Uber, Lyft compromise on ridesharing regulations

uberUber and Lyft, two of the country’s leading ridesharing companies, reached a compromise with state lawmakers on Wednesday over new regulations of the industry that is changing how people get around town.

Assembly Bill 2293, which had been strongly opposed by the ridesharing companies, requires drivers to carry minimum levels of insurance and be covered, at times, by their parent company’s $1 million commercial-grade insurance policy. That $1 million insurance coverage level means ridesharing companies will be required — by law — to carry more insurance than is required of many taxis throughout California.

The amended bill passed the state Senate on a 30-4 vote and now heads to the Assembly for final approval.

Assemblywoman Susan Bonilla, D-Concord, the author of the AB2293, said that the Brown administration has expressed its support for the compromise.

“We have the administration’s support on the bill,” Bonilla said, according to the Sacramento Bee.

Compromise: Graduated insurance levels

The biggest component of the compromise was a reduction in insurance levels for when a driver’s “app” is turned on and ready to accept a passenger. Originally, Bonilla proposed $750,000 in insurance coverage. Under the terms of the deal, that amount has been lowered to $200,000 in coverage. In addition to company coverage, drivers would be required to carry at least $50,000 per accident, $100,000 per person and $30,000 in property damage, according to Capital Public Radio.

After the deal had been reached with Senate leaders, Lyft urged lawmakers to support the measure Lyft had been opposing for months.

“Lyft supports the compromise reached by Senate leadership and stakeholders that provides regulatory clarity for the ridesharing community in California,” the company said in a statement. “Given recent amendments in the bill, Lyft has removed opposition to AB2293 and now encourages support.”

Uber, its biggest competitor and chief partner in fighting the rideshare regulations, offered a less enthusiastic statement.

“Californians loves Uber and lawmakers have heard them loud and clear,” the company said in a statement, according to Venture Beat. “Common sense has prevailed and the winners are Californians.”

Uber, Lyft mobilized users to fight regulations

For months, both companies have mobilized their customers to fight the Legislature’s efforts to regulate the industry.

“If you want to keep uberX in California, now is the time to act,” Uber wrote in one email alert earlier this year.”You are voting with your wallets every day – choosing Uber for a safe, reliable ride. Call your senators and tell them to stand up for Uber, your transportation options and the state’s future – not special interests.#CAlovesUber.”

Earlier this month, Uber delivered more than 17,000 signatures to Bonilla’s office in the State Capitol.

That mobilization paid off with the defeat of a second bill, Assembly Bill 612, by Assemblyman Adrin Nazarian, D-Van Nuys. That measure would have required ridesharing companies to abide by extensive new regulations, including the requirement of background checks, monitoring driving records and drug and alcohol testing.

The companies already rate their drivers and review driving records, which led many to speculate that the regulations are intended as a punitive effort to snuff out the industry.

In an interview with the San Jose Mercury News, another company in the ride-sharing player business said that the bill could mean the end of the industry. Sunil Paul, CEO of Sidecar, told the Mercury News that the bill was “a burdensome approach that is backed by the taxicab lobby, really, to try and shut us down. If it passes, it is a disaster — it would literally spell the end of the ride-share industry.”

Support for Ride-sharing

In their regulatory fight, ride-sharing companies received support from a broad and diverse coalition, ranging from talk radio shows to anti-drinking advocacy groups.

Last week, Mothers Against Drunk Driving issued a letter of opposition to both AB2293 and AB612, fearing that they “could have dramatic consequences for the future of ridesharing in the state.”

“MADD supports new ridesharing platforms like Uber, Lyft and Sidecar as well as traditional taxi services that are enabling more options to provide safe rides in communities across the country,” J.T. Griffin, MADD’s chief government affairs officer, wrote in an open letter to state lawmakers.

That helped bolster the argument commonly made by KABC AM 790’s Mid-Day LA show in their relentless campaign against ride-sharing regulations.

“The taxis are now having competition from someone who is eating their lunch,” John Phillips, the co-host of KABC AM 790′s Mid-Day LA show, said during one heated segment earlier this month.

Lyft’s Statement on AB2293

The following is Lyft’s statement on AB2293:

Lyft supports the compromise reached by Senate leadership and stakeholders that provides regulatory clarity for the ridesharing community in California. Given recent amendments in the bill, Lyft has removed opposition to AB2293 and now encourages support.

The bill allows for insurance companies to update and introduce new policies for consumers who wish to turn their vehicles from a financial burden into an economic opportunity. Riders and drivers will also continue to be protected by Lyft’s $1 million insurance policy whenever they are matched. This current level of protection remains many times higher than what is provided by taxis in major cities like Los Angeles.

Policymakers who want to ensure the future of ridesharing as a safe, convenient and affordable transportation alternative in California should support this compromise.

Ridesharing – which has also provided new income opportunities for Californians across the state and new transportation alternatives offering the promise of reduced congestion and air pollution — is in its very early stages. This agreement allows ridesharing to continue to grow and evolve.

Lyft thanks the thousands of Californians who have expressed their strong support for ridesharing in recent weeks and is grateful for the efforts of state leaders to find common ground that allows ridesharing services to continue to thrive.


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  1. Andy
    Andy 28 August, 2014, 12:24

    Let these ride-sharing cars pay same as taxicab do. What’s the problem?

    Reply this comment
    • MattiusLang
      MattiusLang 12 August, 2015, 21:11

      Because free citizens interacting privately is none of the government’s business. Lyft and Uber are just the matchmaker. Freedom of association is basic 4th amendment stuff. Should my mother have been required to carry extra insurance because we carpooled to school? This was just a backhanded attempt bu the Taxi union to backdoor ban another basic freedom after they saw the mess caused by the attempts at direct bans on he east coast. Nothing honest about California D’s.

      Reply this comment
  2. Mattius Lang
    Mattius Lang 12 August, 2015, 21:19

    Here’s what scares me about this law- now that there is an insurance requirement tied to accessing cell phones, the mere possibility that someone /might/ be running the app on their smartphone is now going to trigger the query “License, registration and cell phone please” because you will now have to prove you are not running the app so the officer knows how much insurance coverage you should have. Once you’ve unlocked your phone with your password, you’ve just given legal permission to search the phone. This has the potential for such an unbelievable invasion of privacy rights and another BS Trojan horse under the guise of nanny government trying to “protect you.” So sick of being told that as an American I need to be protected from all other Americans, except the ones in government, because those are the only good Americans.

    Reply this comment

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