Representatives from ride-share companies Lyft and Uber explained to a House committee in Harrisburg on Monday how and when their insurance policies cover drivers and passengers.
But the head of the Insurance Federation of Pennsylvania said a much more coordinated effort is needed among insurance companies, ride-share companies and regulators to ensure consumers aren’t left by the side of the road. And many of the committee members welcomed innovation in transportation, but said they were concerned over the details.
House insurance committee chairwoman Rep. Tina Pickett, R-Bradford, said the goal was to clarify what entity provides coverage in the event of an accident. Lyft and Uber are San Francisco technology companies that have created smartphone apps to connect drivers using their own cars with passengers.
The state insurance commission has noted personal auto insurance policies in most instances do not cover commercial activity such as transporting someone for compensation. The issue of whether the companies should be considered commercial entities is the subject of a separate hearing later this week in Pittsburgh.
The Pennsylvania Public Utility Commission is seeking a cease-and-desist order against Lyft and Uber for operating without certificates of public convenience. The PUC has also proposed daily fines of $1,000 against each company.
Jim Black, executive vice president for Lyft, told the House committee Monday that under his company’s policy, during the “match period,” when a driver has been assigned to a rider via the app, it has a $1 million excess insurance policy. If a Lyft driver is in an accident during this match period and the driver’s personal auto policy denies coverage, Lyft’s policy would cover the entire claim.
If a driver has the app on but is "pre-match," Mr. Black said — that is, available for hire with the app on but not yet matched to a passenger — Lyft provides contingent coverage of $50,000 per person in bodily injury coverage and $100,000 per accident.
J. Robert Wooley represented Uber, which operates its UberX service in Pittsburgh. Mr. Wooley testified he was commissioner of insurance in Louisiana from 2000 to 2006, and is “very familiar” with the types of insurance policy questions being raised. Uber’s policy is similar to Lyft’s, offering excess coverage of $1 million and contingency coverage when a driver is not actively transporting a passenger but has the app turned on.
Mr. Wooley said the argument that ride-share companies should provide insurance to drivers 24 hours a day was not reasonable. He pointed to the widespread use of pizza delivery drivers who use their own vehicles but don’?t have insurance coverage from Pizza Hut when they’re on personal errands.
Samuel Marshall, CEO of the trade group Pennsylvania Insurance Federation, said his group wasn’t trying to stand in the way of innovation, but wants to make sure consumers understand where their liabilities are — whether they’re drivers or passengers of ride shares.
Also appearing at Monday’s hearing was Yellow Cab president James Campolongo, to talk about his company’?s Yellow X ride-sharing app, which has received approval from the state Public Utility Commission. Yellow X will operate a little differently from Lyft and Uber, as its drivers will lease their own vehicles to Yellow Cab while they are in service.
“During this time, Yellow Cab will be legally and technically responsible for their operation,” Mr. Campolongo testified.
State Rep. Mark Mustio, R-Moon, who is president of Coraopolis insurance company Hicks Heim Mustio, testified before the committee with Mr. Marshall. He said after the meeting that he plans to introduce legislation to amend the PUC code. He did not elaborate on specifics, but said the rules in place need to be updated.
“These are great services,” he said, “but we need to make sure we vet this properly, because it affects the public.”
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