Infrastructure & Environment

Los Angeles Eases Closer to Tough Rules About Ride-Share Services

by | June 12, 2014
 

By Emily Alpert Reyes and Marc Lifsher

Three members of the Los Angeles City Council called Tuesday for state lawmakers to back tighter state regulation of ride-sharing companies, such as Lyft and Uber, arguing that existing rules leave passengers using the firms' smartphone apps vulnerable and put traditional taxicabs at an unfair disadvantage.

"When it comes to public safety, there shouldn't be a double standard in Los Angeles," Councilman Paul Koretz said, calling the ride-sharing firms "well-financed bandit cabs with apps."

Koretz and Councilman Gil Cedillo joined scores of taxi drivers at a news conference Tuesday to urge passage of AB 612 by Assemblyman Adrin Nazarian (D-Sherman Oaks). The bill, one of two competing measures making their way through the Legislature, would require ride-sharing companies to carry the same 24-7 commercial insurance coverage as regular taxis.

Insurance companies have backed a bill by Assemblywoman Susan Bonilla (D-Concord), AB 2293, that would make the ridesharing company responsible for "primary" coverage any time a driver's ridesharing app is turned on and he or she is available to pick up passengers for money. Negotiations on the detailed provisions of the bills are continuing and both measures are scheduled to be heard by the Senate energy committee next week.

The full City Council hasn't taken a position on the legislation, but Koretz, Cedillo and Councilman Paul Krekorian introduced a resolution Tuesday calling for the city to support AB 612. Cedillo argued the legislation would hold Uber, Lyft and other similar companies to the same standards as taxicabs.

"We cannot tolerate an industry that's unregulated, unsafe and unacceptable," Cedillo said, echoing the slogan printed on the red shirts of taxi drivers standing behind him on the steps of Los Angeles City Hall.

Uber spokeswoman Eva Behrend said company drivers already have to pass a "rigorous" background check and have a "best-in-class insurance policy." She called the two bills pending in the state Senate "thinly veiled attempts to end ride-sharing in the state."

"This legislation is not about safety or consumers; it's about protecting entrenched Sacramento special interests from competition," Behrend said in a statement emailed to The Times.

Lyft spokeswoman Chelsea Wilson offered similar arguments, saying Lyft has a $1-million commercial excess liability insurance policy that far exceeds what is required for taxis in Los Angeles. The company also "screens out applicants for any violent crimes, sexual offenses, theft, property damage and felonies," Wilson said in an emailed statement.

As the battle over the proposed legislation continues in Sacramento, the California Public Utilities Commission, which has legal jurisdiction over ride-sharing companies, is in the process of tightening and clarifying its insurance requirements for the firms.

Late Tuesday, a commission administrative law judge issued a proposed decision that significantly increases insurance requirements for ridesharing companies seeking state operating licenses. The finding, which must be approved by a majority of the five-member commission, said that ridesharing firms must provide the primary insurance coverage any time the smartphone app is turned on, even when a passenger is not in the car. Ridesharing companies also must provide medical, comprehensive and collision and uninsured driver coverages, the proposed decision said.

Current regulations call for $1 million of coverage that kicks in after a driver's personal insurance hits its limit. Rules also require criminal background checks and safety inspections of cars, among other things.

The L.A. City Council members' call for tighter rules comes a week after an Uber driver was accused of abducting a drunk woman and taking her to a hotel in Van Nuys. Prosecutors did not file charges against the man, saying there was insufficient evidence. Uber disabled the driver's account after learning of his arrest.

(c)2014 the Los Angeles Times

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