As the sharing economy expands and more Californians are getting rides from transportation network companies (TNC) like Uber, Lyft, or Sidecar, new rules are needed to protect passengers, drivers, and the public.
“I have introduced AB 2293 to clarify existing insurance laws related to ride sharing service activities while supporting new business advancements,” said Assemblywoman Bonilla. “California is a technology leader and as new ideas are developed and brought into the marketplace, we need to make sure rules are in place to notify and protect those using new services.”
The TNC business model allows drivers to use their personal vehicles to pick up and drive riders, for a fee, using a smart phone app. This model requires a driver to use their personal vehicle for commercial activity. The personal automobile insurance policy is not designed or intended to be used for commercial activities and contains a specific exclusion for livery activities.
“As this new transportation option has grown and expanded, gaps in insurance coverage have been identified,” said Bonilla. “My legislation will define when commercial activity begins and ends along with providing important disclosures to TNC drivers which will ensure that all parties are aware of the insurance policy coverage which is in place.”
AB 2293 will do four things:
- Require TNCs to disclose to drivers upfront that their personal insurance may not apply when engaging in commercial TNC activities.
- Define in statute that TNC activities begin once the “app” is turned on and the TNC services end when the “app” is turned off.
- AB 2293 clarifies that the TNC business company insurance is the primary insurance coverage.
- Require TNCs’ liability insurance to defend their drivers when the driver has a claim or accident.
AB 2293 will be heard in the Assembly Utilities and Commerce later today.