Friday, July 17, 2015

What Implications do the Latest Ride-Share Rulings Have for California’s Changing Transportation Landscape?

To a lot of Californians, Uber, Lyft and the like represent the future – the transportation network companies (“TNC”) are using technology to change the way people view transportation.  There are a lot of legal and regulatory shifts, however, that will determine ride-sharing’s ultimate fate.  One of these developments is a recent vote in the State Assembly against requiring random drug testing for drivers that work for ride-sharing companies. While everyone else who is paid to drive passengers is subject to random drug testing, TNC drivers are now exempt.

Ride-sharing companies are not unaware of the fact that their very business model could bring about changes in how regulators view the passenger transportation industries. While TNC services don’t have the same requirements for drivers as taxis, limo drivers, etc. they have something else – technological advancements that allow information to be passed rapidly which then translates to quick action when passenger safety is at issue.

That being said, there is also a pushback against the very framework of the TNC’s – not just from other businesses that transport individual passengers, but from those on the street, so to speak. This was brought into sharp relief when the California Labor Commission ruled on one particular Uber driver this month who sued Uber, deciding that she was an employee and not an independent contractor as TNC drivers are purported to be.

On a different note, arguably in an act that legitimizes the ride-sharing model, the California Insurance Commission authorized Farmers Insurance to provide additional coverage to TNC drivers that protects them during a period of time when drivers heretofore found themselves with no coverage whatsoever. “Period one” as it’s known.

Here is Farmer’s official Rideshare Policy Extension:

What does Farmers Rideshare cover?
Farmers Rideshare extends your personal auto insurance coverage until you accept a ride and the rideshare company’s full $1M commercial coverage applies. This policy enables you to select the coverage that fits your needs, including:
Comprehensive and collision coverages that pay for damages to your car
Uninsured motorist coverage, in case you are hit by a driver who isn’t insured or is                             underinsured
Medical payment and personal injury protection (if required)
Farmers Rideshare coverage ends when you accept a ride. The rideshare company’s full $1M commercial coverage applies until that ride exits your car. Farmers Rideshare once again applies until you accept your next ride.

Perhaps one of the most telling signs that changes to our transportation system are on their way is the announcement by Los Angeles Mayor Garcetti that the LADT is hiring an ride-share and autonomous car advisor, to assist in transitioning to a new era molded by environmental and technological developments.