Hawaii lawmakers are considering a bill to close the gap in car insurance coverage for transportation network companies like Uber and Lyft.
Supporters of the bill say right now, Uber and Lyft drivers might not be covered by insurance for accidents and injuries depending on whether a passenger is in the car. The Hawaii bill would set rules for insurance requirements for transportation network companies and their drivers.
Nationwide, about 30 states have passed laws to close insurance loopholes for transportation network companies.
The original Hawaii bill would have set regulations for insurance for self-storage facilities. But after another bill to regulate Uber and Lyft died in the House, lawmakers in the Senate gutted the part about self-storage facilities to replace the language with insurance regulations for transportation network companies.
“It didn’t make it out of the house for some reason,” said Sen. Rosalyn Baker (D, West Maui, South Maui), who heads the Senate committee where the bill was changed. “It will protect both consumers and the drivers of the transportation network companies ensuring that they have appropriate coverage.”
Supporters of the bill say that Uber and Lyft drivers currently might not be covered by insurance for accidents if the app is on when a passenger isn’t in the car. The proposal would also require transportation network companies to provide written disclosure of the fact that drivers’ personal insurance policies may not cover accidents or injuries while they’re working.
“A regulatory and statutory framework is needed to protect not only drivers, but their passengers and the public by closing the insurance gaps that left drivers and the public vulnerable in an accident,” said Mark Sektnan, vice president of Property Casualty Insurers Association of America.
But Uber and Lyft opposed the measure, saying it doesn’t set clear and comprehensive rules that protect the public’s safety and consumer choice.
“The bill contains a number of ambiguities that will result in confusion in the marketplace and likely lead to litigation,” said Brian Hughes, the general manager of Uber Hawaii.
The Hawaii bill is very different from those passed in other states, and would have to be “substantially changed” for Uber to be able to operate under it, Hughes said.
Meanwhile, the Honolulu City Council is also considering a proposal to treat transportation network companies like taxis. Opponents say it could drive companies like Uber and Lyft out of the state.