A deal cut between insurance companies and smartphone-based ride-sharing services like Uber over driver coverage could soon receive signoff by the Legislature and save the company's presence in Minnesota.
A pair of measures await debate on the House and Senate floors over how much the ride-sharing companies must insure their drivers in "phase one," or after they've turned on the app but before they accept a fare.
After a contentious two weeks that included lengthy committee hearings, rallies and e-mail blitzes by Uber, the amount of required minimum liability coverage in the legislation shrank significantly. The compromise pleases both insurance companies, who say it closes a dangerous loophole, and Uber, which said the costs of the initial proposal could have driven the company out of Minnesota.
"I think last week's bills, both in the House and Senate, were so far off from any of the bills that we've actually seen in the U.S., period," said Uber Minnesota General Manager Kenny Tsai, who added that he's happy with the current proposals but knows they're not final. "Let's see what happens. I'm sure a lot can happen between now and the end of the session."
Under the current legislation, Uber must supply its drivers in phase one with minimum limits of $50,000 in death and injury liability coverage, $100,000 in total coverage and $30,000 in property damage. Earlier incarnations required Uber to furnish its drivers with $1 million insurance policies before their drivers accepted a fare.
Although a House bill and Minneapolis and St. Paul city ordinances call for $1 million in coverage after a driver accepts a fare and has the passenger in their vehicle, the Senate legislation would bump that to $1.5 million.
The bill sponsored by Sen. Kari Dziedzic, DFL-Minneapolis, is a response to concerns from 26 state commerce commissioners about insurance coverage gaps for ride-share drivers after 6-year-old Sophia Liu of San Francisco was struck and killed in 2013 by an Uber driver awaiting a fare request. That incident led to a lawsuit against Uber over insurance liability. As a result, California became the first state to pass a measure requiring that Uber supply its drivers with phase one coverage.
While lawmakers backing the measure said it would prevent lapses in coverage, Uber representatives balked at the initial $1.5 million, saying the increased costs of such a requirement could determine whether the service expands — or even remains — in the state. The House Commerce Committee, with the insurance industry's blessing, significantly lowered the amount of minimum coverages last week.
Earlier this week, a "global agreement" between the nation's leading insurance providers including Allstate and State Farm, and ride-share companies Uber and Lyft helped shape the Senate legislation. Tsai said that although "we're about 99 percent there," the company would like Minnesota's current legislation to more closely reflect the global agreement.
Mark Kulda, vice president of public affairs for the Insurance Federation of Minnesota, said the organization is pleased with the legislation's latest incarnation.
"This brings the clarity that is needed," he said, adding that with emerging services like Uber and Lyft, the insurance industry will catch up as well. "What is preserved in this is the ability for the insurance market to change and adapt."
Kulda said that change could include personal insurance policies that could include commercial policy provisions for drivers who want to work on the side for Uber or Lyft.
"There will be some new, innovative products that are actually in other states right now that will probably come here," he said, possibly within months.