Negotiations in Arizona to Update Ridesharing Law Underway

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A key lawmaker said talks she’s leading among taxi firms, rideshare companies such as Uber and insurers on an updated law regulating the new and growing rideshare industry are progressing.

Rep. Karen Fann, chair of the insurance committee, said parties are close to reaching an agreement. Fann is trying to work out a compromise that will level the playing field between the new ridesharing companies and traditional taxi services. How the new services are insured is a key issue that Fann said in an interview appear to be nearly solved.

Arizona regulators stopped issuing citations to rideshare company drivers last month as the Legislature works to craft a new law allowing them to operate legally.

The Legislature passed a bill last year that would have exempted the new app-based transportation companies from insurance regulations imposed on traditional taxi and livery companies. It was vetoed by then-Gov. Jan Brewer, who said it failed to protect consumers.

The companies, which call themselves “ridesharing services,” have continued to operate. The state Weights and Measures Department had issued nearly 100 citations by November to drivers who did not have proper commercial licenses or insurance.

Fann said the deal she’s working on would level the playing field by make both taxis and rideshare companies adopt zero-tolerance policies for drug use. That deal would stop state testing of taxi drivers but pass the responsibility for maintaining anti-drug policies to all companies.

The biggest issue is the insurance coverage for rideshare drivers. The companies provide a large commercial policy when a passenger is in their car, but at other times drivers operate using just their noncommercial personal insurance. Fann said insurers are prepared to offer policy “riders” that kick in to fill that gap.

Gov. Doug Ducey said he decided to stop state regulators from citing drivers for rideshare companies such as Uber and Lyft last month because the policy wasn’t working and was hampering job creation.

He said the companies are innovative and entrepreneurial and he wants to see them thrive.

Last year’s fight over the so-called Uber bill was one of the bigger issues of contention within the state Legislature. Democrats and Republicans were split within their own parties. Proponents of the bill said government should stay out of the way and let new companies innovate, while opponents said the lack of regulations pose a public safety threat.