Minnesota lawmakers could decide whether to regulate the ride-hailing industry this year.
House and Senate legislators say they plan to introduce bills soon to toughen insurance regulations for companies like Uber and Lyft.
That would add Minnesota to the growing list of states wrestling with the new services, which use mobile apps to connect customers looking for a ride with nearby drivers.
Uber and Lyft have faced disgruntled taxi drivers, lawsuits and skeptical officials across the country as the California-based companies expand. Legislators could use the Minnesota bills as a chance to join the debate or leave regulation to cities.
Minneapolis and St. Paul already regulate ride-hailing companies, though in some ways not as strictly as the taxi industry. Uber representatives say insurance laws in those cities already solve the problem lawmakers hope to address.
Rep. Chris Swedzinski, chief author of the House bill, said drivers aren’t covered by their personal insurance policies when they provide rides to paying customers. But companies’ insurance policies don’t kick in until a mobile app has matched rider and driver.
That leaves a gap where drivers looking for fares — and potentially glancing away from the road to check a smartphone screen — aren’t covered beyond the state’s $20,000 no-fault insurance in case of an accident, Swedzinski said. His bill would require insurance for drivers in those situations, with either the driver or the ride-booking company paying the bill.
“This is serving a lot of people across the state, which is great,” the Ghent Republican said. “But we want to make sure we’re safe.”
State Commerce Commissioner Mike Rothman wrote in a letter to lawmakers late last year that he was “seriously concerned” about the gap in coverage and urged them to develop a statewide insurance standard.
Kenny Tsai, general manager for Uber in Minneapolis and St. Paul, said he couldn’t comment on the legislation without seeing it. But he said auto insurance companies are already starting to offer ride-booking policies to interested drivers, which could solve the problem.
“We may be buying coverage that is rarely if ever needed” under the proposed law, said Joel Carlson, a lobbyist for the San Francisco-based company.
Swedzinski and Sen. Paul Gazelka, R-Nisswa, said they want the regulation expanded statewide to ensure adequate coverage for drivers and riders if the services’ popularity grows beyond the metro area.
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