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Updated Mar 29, 2014 - 4:11 pm

Arizona battle over ridesharing services heats up

PHOENIX — Arizona has joined a number of states debating how to regulate
so-called ridesharing programs that have popped up around the country and riled
traditional taxi and limousine establishments.

An amendment to an unrelated bill being debated in a Senate committee last week
would categorize the tech-startup programs as “transportation network
service,” exempting them from certain rules that apply to taxi and limousine
companies. Members of the Senate Committee on Commerce, Military and Energy
approved the amended bill with a 4-1 vote on March 19.

The amendment to House Bill 2262 is yet another attempt to regulate the
relatively new service, which allows members to hail rides with a swipe of
smartphone on sites like Uber and Lyft. A similar bill in the House was approved
in a committee but later died.

The amendment was celebrated by proponents of ridesharing programs, who say
they should not be subject to the same regulations as cabs in part because they
do not pick up people from the street, but rather members of the service who
request a driver.

The amendment would require ridesharing programs to provide a minimum $1
million insurance coverage for drivers and to conduct a criminal background and
driver’s license checks. But it would also exempt them from regulations that
apply to taxi drivers and would prohibit cities, counties and towns from
enacting their own regulations. The amendment does not require the companies to
provide insurance coverage at all times that a driver is on the job, as many in
the insurance and tax company industry believe they should.

“The concept that we’re dealing with right now on this legislation is a
relatively new concept and one that we are trying to put some regulatory
framework around,” Uber and Lyft lobbyist Wendy Briggs said. “This is an
alternative form of transportation, cheaper, faster than a taxi. And I would
advocate (they are) much safer.”

Uber is a San Francisco-based startup that now operates in 80 cities in the
United States and in six continents. Lyft is a similar company that uses a
mobile app to connect riders with drivers who charge them based on a donation
instead of a fare.

Traditional transportation companies said the proposed rules are unfair and that
the companies present safety risks to passengers. The debate has taken shape in
the form of legislation in Colorado, Georgia, Maryland and other states that are
trying to figure out how to regulate something so technology-driven.

Mike Pinckard, president of Total Transit, a parent company of Discount Cab,
said he welcomes the competition that ridesharing companies bring, but that they
should be held to the same standards as all transportation services.

Pinckard said he thinks the companies should be required to provide insurance
coverage for their drivers at all times, not just when they are picking up a
passenger. Uber already insures drivers with $1 million policies, but only from
the time the driver accepts a pick-up to the time the driver drops off the

That means a driver who is working out 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.
The 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 that Uber is financially responsible
because the driver was waiting for customers. Uber says it isn’t liable because
no passengers were in the car.

“If a driver was involved in an accident in an activity-based scenario, you’re
gonna have disputes and litigation until the cows come home,” Pinckard said.
“All we’re saying is get insurance.”

Briggs maintains rideshare programs are safer then cabs because consumers get
information about the driver and the car they are being picked up in through the
phone application.

“You’re talking about an ability to get people to point A to point B, whether
it’s the elderly going to dialyses or in New York they use this to get their
kids from point A to point B,” she said.

David Childers of the Property Casualty Insurers Association said rideshare
drivers are incentivized to be out and available when rides are requested, and
they are not just sitting at home waiting for ride requests.

“That would mean Friday and Saturday nights in Old Town Scottsdale. Near the
airport. High-traffic areas that pose an entirely different risk than risks
associated with taking your kids to school. They have a responsibility to
provide coverage for their drivers,” Childers said.


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