Arizona Senate Takes Side of Uber, Lyft Ridesharing Services

Calling Uber a cutting-edge concept, the Arizona Senate approved a bill that exempts it and other rideshare companies from the same regulations that traditional taxi and limo companies have.

The amended bill exempts rideshare companies from the commercial insurance requirement that affects traditional taxi, limo and livery companies by not requiring that drivers be insured at all times on the job. It also would not require that rideshare drivers be drug tested. It would require that Uber insure its drivers with $1 million policies.

Uber currently insures drivers with $1 million policies, but only from the time the driver accepts a pickup to the time the driver drops off the passenger.

That means a driver who is working on the road but has not yet received a request for a ride is not insured by the company unless the driver’s personal insurance denies the claim, in which case Uber provides its contingent policy.

Ride Hailing AppsThe issue became especially heated nationwide after a 6-year-old girl was killed in a crosswalk by a driver logged into the Uber app in San Francisco on New Year’s Eve. The girl’s family contends Uber is financially responsible because the driver was waiting for customers. Uber says it isn’t liable because no passengers were in the car.

The vote comes after weeks of aggressive media campaigns by Uber, which says it shouldn’t be subject to the same regulations as cabs because they do not pick up people from the street, but rather members of the service who request a driver.

Gov. Jan Brewer has expressed concern about the bill.

“The governor’s concern has always been about balancing innovation with consumer safety, and protecting consumer safety,” said Don Hughes, deputy director of policy. “We have told them that there should be no gaps of insurance coverage.”

Sen. Robert Meza, D-Phoenix, said lawmakers had a choice of being “old school” and never implementing change. “Or we could be cutting edge as a state and implement this model in the state of Arizona,” he said.

The voice vote came after a lengthy debate surrounding two major amendments to the bill. One, by Sen. John McComish, R-Ahwatukee, would have required rideshare companies to provide insurance coverage at all times that a driver is on the job but would give the companies different options as to how to purchase that insurance. The amendment would require Uber to conduct drug tests and criminal and driver’s license background checks.

“The reality is that these new guys are billion dollar corporations that have entered the Arizona marketplace that basically broke the rules and now they want special legislation,” McComish said.

But members voted down his amendment and adopted one by Sen. Kelli Ward, R-Lake Havasu City.

Her amendment would not require pre-employment drug tests but would require Uber and others to conduct drug tests if a passenger complained that a driver may have been under the influence of drugs or alcohol while on a ride.

“That’s what I call teeth,” Ward said.

The Ward amendment also would notably require that insurance payouts in the case of an accident go to either the repair shop or the car lien holder instead of the driver.

The Senate approved the bill with a 20-8 vote. It will now go to the House.