The California Public Utilities Commission today welcomed the creation of an umbrella group to look at insurance issues for online rideshare services, but noted it is participating as an observer.
PUC President Michael Peevey, in a statement issued at the commission’s headquarters in San Francisco, also said he will follow the group’s work for the purpose of diagnosing insurance gaps and possibly proposing new regulations to address them.
“I will keep a close eye on this and if there is an insurance gap that has been identified and confirmed, then I will propose regulations that could close the gap if the market has not stepped in to do so,” Peevey said.
The online-based services, dubbed transportation network companies by the PUC, include companies such as Uber, Lyft and SideCar that use smartphone applications to match people who need rides with drivers who use their private cars to provide rides for pay.
Last week, Lyft announced the formation of the Peer-to-Peer Rideshare Insurance Coalition, made up of representatives of the industry, regulatory agencies and insurance companies.
The coalition’s purpose is to “build a foundation of insurance best practices, policies, and information for peer-to-peer ridesharing,” said Lyft, which announced the group’s first meeting will take place later this month.
Today, Lyft posted on its blog a list of initial participants, who include Lyft, Uber, SideCar, representatives from Allstate Corp. and Farmers Insurance Group, a former Esurance executive, and a former official from the National Highway Traffic Safety Administration.
The PUC said in its statement that it is participating as an observer to monitor the coalition’s progress and advise it of PUC legal and regulatory requirements.
“I’m happy to see this diverse set of participants come together to find a market solution that will enhance insurance for the transportation network companies,” Peevey said.
The commission began regulating the online ride industry in a September order that requires companies to be licensed by PUC, run criminal background checks on drivers, conduct driver training and hold commercial liability insurance of at least $1 million per incident.
The insurance must cover vehicles and drivers in transit to or during a trip arranged through the company.
Public concern about the scope of insurance for such companies and drivers and the circumstances in which it would apply has grown in the wake of several recent accidents.
On New Year’s Eve, an Uber driver struck and killed 6-year-old Sofia Liu as she walked with her mother and brother at Polk and Ellis streets in San Francisco at about 8 p.m.
The driver, Syed Muzzafar, 57, of Union City, had allegedly completed a trip arranged via Uber earlier in the day.
After the accident, the company issued a statement expressing condolences for the child’s death, but saying, “The driver in question was not providing services on the Uber system during the time of the accident.”
But in a San Francisco Superior Court lawsuit filed against both Uber and Muzzafar on Jan. 27, Sofia’s parents claim Muzzafar was acting as a Uber driver at the time because he was allegedly viewing or interacting with his Uber smartphone app. The lawsuit claims using the app made him distracted and inattentive.
Muzzafar was arrested on suspicion of vehicular manslaughter with gross negligence and failure to yield to pedestrians in a crosswalk and was freed on bail. He has not been criminally charged thus far.
In another accident, a Lyft driver struck and injured an elderly woman at a crosswalk in the Nob Hill area of San Francisco on the afternoon of Jan. 17. The company later confirmed that the driver was carrying a Lyft passenger at the time.
Uber spokesman Andrew Noyes said of the coalition today, “We look forward to finding additional ways to ensure safety on the road for our transportation partners and their passengers.
“We believe that a dialogue with policymakers, the insurance industry and other stakeholders is important and we are pleased to be a founding member of the coalition,” Noyes said.
Julia Cheever, Bay City News