Legislation Was Needed As Ridesharing Companies Grew
Ridesharing companies have been rapidly expanding across Florida. Uber has over 40,000 drivers in the state, with no signs of slowing down. Currently, Uber and Lyft are competing to enter and establish themselves in the South Florida marketplace. Lyft’s Florida general manager has claimed that the company is “the fastest-growing ride-sharing network in Florida. Since 2014, Lyft ridership has increased three-fold.
As ridesharing companies grew, local municipalities rushed their attempts to pass legislation. This caused problems because the laws were inconsistent from municipality to municipality. Not only did this cause confusion for drivers, but it also created problems if drivers drove from one municipality to another, or drove in a municipality that they weren’t registered in.
St. Petersburg Senator Jeff Brandes introduce legislation in January that sought to solve these problems. He said at the time, “This is something that Florida businesses demand, tourists expect, and our residents deserve. It is time to end the patchwork of regulations across the state that stand in the way of transportation innovation and adopt a uniform, common sense law focused on safety and access to the new technology.”
In May, Florida passed HB221, otherwise known as the “Uber/Lyft Bill.” This law was the state’s first attempt at passing regulations for ridesharing companies. Regulations within the bill included driver background checks and insurance coverage requirements. The law provided uniform regulations for the entire state of Florida, thereby eliminating the patchwork of local laws that had previously existed. The law also called for operations audits to be provided to the state every other year, and for the ridesharing services to provide information on digital networks to law enforcement agencies. At the time the law was passed, ridesharing services were offered in 35 Florida cities.
After signing the bill into law, Governor Rick Scott said, “I’m proud to sign this legislation today to make it easier for ridesharing companies to thrive in Florida and help ensure the safety of our families. Florida is one of the most business-friendly states in the nation because of our efforts to reduce burdensome regulations and encourage innovation and job creation across all industries, including transportation. I look forward to seeing the continued growth of ridesharing companies in our state.”
How The Law Impacts Ridesharing Companies
Perhaps the biggest component of the law was the insurance requirements. The law mandated that ridesharing companies
• Carry $100,000 of insurance for bodily injury or death in situations where a driver is logged into the app but has not secured a passenger
• Carry $25,000 of insurance for property damage in situations where a driver is logged into the app but has not secured a passenger
• Carry $1,000,000 of insurance for accidents that occur while a passenger is in the car
Ridesharing companies were in support of the law. Both Uber and Lyft were already abiding by many of the policies that were enacted in the law. But, they appreciated having legal precedent established across the state. Uber’s general manager for Florida operations, Kasra Moshkani, said, “We’re really excited to see what has been worked on for the last couple of years finally come to fruition. We now have one set of regulations that are consistent and clear across the state.”
Why Will The Bill Cause Coverage Disputes?
The law mandates that the coverage requirements are the primary coverage requirements. These requirements are not reflective of a driver’s personal auto insurance record. If you recall, Florida is a no-fault state, which means all drivers must have personal injury protection to own and operate a vehicle.
The new law specifies that insurance companies may deny personal injury protection coverage to rideshare drivers. Insurance companies can deny this coverage if the driver is logged into their ridesharing app. This is because ridesharing companies’ mandatory coverage is enacted whenever a driver is logged into the app. Many personal injury coverage policies will refuse coverage if a policyholder is driving for a fee.
Unfortunately, the law’s statutory language is ambiguous and uncertain. It will be interesting to see how the courts establish precedence over the coming months as more coverage disputes emerge. In the meantime, insurers will have to determine if their policy coverage, as currently written, needs to be changed as the result of the new statutory insurance requirements. Insurers may need to rewrite their contracts to help minimize exposure. If you think this affects you, your trusted lawyer can help decipher the language in your policy.