Transport Cars

Arizona Governor Will Decide if Rideshare Companies Are Exempt from Regulations

Apr 24, 2014 8:00 am

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Lawmakers and the local and state level will soon be forced to reckon with the un-level playing fields they’re creating between drivers with apps and those without.

— Jason Clampet

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Promotional materials from Lyft. Garrett Heath of SA Flavor / Flickr


The fate of how Uber and Lyft operate in Arizona is now in the hands of Gov. Jan Brewer.

The Arizona House of Representatives on Wednesday gave final approval to House Bill 2262, which exempts Uber and other rideshare companies from the same regulations that traditional taxi and limo companies have.

The 31-22 vote came after a more than hour-long debate between proponents of the bill, who say government should stay out of the way and let new companies like Uber innovate, and opponents, who say the lack of regulations pose a public safety threat. The bill had opposition from several Republicans and Democrats.

“We’re so afraid of freedom. It’s like it’s the boogey man,” said Rep. Warren Petersen, R-Gilbert, a supporter of the bill.

Added bill sponsor Rep. Tom Forese, R-Gilbert: “Support this in the name of innovation and in the name of disruption.”

But many, including conservative Republicans, weren’t sold on the bill.

House Speaker Andy Tobin, R-Paulden, said the bill doesn’t properly address concerns about the appropriateness of Uber’s insurance coverage. “In my view what I asked to be resolved wasn’t resolved on this issue,” Tobin said.

Rep. Jonathan Larkin, D-Glendale, said the issue boils down to passenger safety. “In my book, public safety comes first. If anything is questionable, especially when it comes to safety, you just don’t do it,” Larkin said.

The bill exempts rideshare companies from the commercial insurance requirement that affects traditional taxi, limo and livery companies by not requiring that drivers be insured at all times on the job. It also would not require that rideshare drivers take drug tests. It would require that Uber insure its drivers with $1 million policies.

Uber currently insures drivers with $1 million policies, but only from the time the driver accepts a pickup to the time the driver drops off the passenger.

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

The vote comes after weeks of aggressive media campaigns by Uber, which says it shouldn’t be subject to the same regulations as cabs because the company does not pick up people from the street, but rather members of the service who request a driver.

Gov. Jan Brewer has expressed concern about the bill.

“The governor’s concern has always been about balancing innovation with consumer safety and protecting consumer safety,” said Don Hughes, deputy director of policy. “We have told them that there should be no gaps of insurance coverage.”

Steve Thompson, general manager for Uber Arizona, urged the governor to sign the bill.

“Uber and the tens of thousands of Arizonans that support ridesharing are grateful to the legislators who stood up for transportation equality with the passage of this legislation. This is truly a victory for innovation over the status quo,” Thompson said.

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