Uber, Lyft face stricter regulations under Senate proposal nearing conclusion

03/10/2015 01:39 PM

FRANKFORT — Legislation allowing the Transportation Cabinet to further regulate ride-sharing services like Lyft and Uber has cleared one of its final legislative hurdles Tuesday.

The House Transportation Committee unanimously passed Senate Bill 153, sending the bill the House’s consent calendar and all but ensuring its trip to Gov. Steve Beshear’s desk.

The ride-sharing companies have been operating under an emergency regulation drafted by the Transportation Cabinet, and Sharon Clark, commissioner of the Kentucky Department of Insurance, said the need for clarity regarding insurance coverage for Uber and Lyft drives became apparent after an Uber driver struck and killed a 6-year-old girl in San Francisco last year.

The issue boils down to when private or commercial insurance coverages assumes responsibility in accidents for the drivers, who often carry passengers in their personal vehicles.

“There is what we call a bright line of when your personal car coverage is in effect and when you’re commercial,” Clark said, noting most insurers will not cover drivers ferrying passengers through personal insurance plans.

“… Our concern is if the application is turned on and someone is receptive to having a passenger and there is an accident in that timeframe, is the personal-lines coverage going to be responsible or the commercial lines for that activity?”

Sen. Ernie Harris, a Prospect Republican and sponsor of SB 153, said personal insurers might offer riders specifically for Uber and Lyft drivers, allowing them to work for the ride-sharing companies under their private insurance coverage.

The legislation resolves the coverage question through administrative regulations to give the state flexibility to handle the growing ride-sharing industry, he said.

“My pushback has been more of the insurance companies wanting to clarify when insurance companies take responsibility,” Harris told reporters after the meeting.

“I haven’t heard anything from the taxis or the limos. In fact, some of the limo drivers and taxi drivers are also Uber and Lyft when they’re not working otherwise, so because this is an evolving industry, I think it’s important to allow it to evolve and let the insurance companies work out if they’re going to cover it or not, if they’re going to sell riders or not.”

Uber and Lyft, which connect drivers with passengers through a mobile application and only operate in Louisville and Lexington in the state, have signaled a willingness to exceed base insurance standards, Harris said, noting SB 153 would put Uber and Lyft on equal footing with taxi companies and limo services regarding insurance coverage.

SB 153 would also establish procedures to license ride-sharing drivers and certify such companies.

Lyft spokeswoman Chelsea Wilson said the company appreciated lawmakers’ efforts to craft new rules for ride-sharing services.

“We will continue working with state leaders to eliminate regulatory burdens and privacy concerns that remain in the bill,” Wilson said in a statement.

Uber did not respond to a request for comment.


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