North Carolina Moves to Regulate Uber and Lyft Ride Sharing

Ride sharing services such as Uber and Lyft have made headlines over the last year due to an apparent lack of regulation.

While these services are seen as a cheaper alternative to taxis, some of the liability issues have proved to be a nightmare for regulators and attorneys alike.

Lyft, UberX and Sidecar drivers use their personal vehicles for fares.

They have been subjected to calls for regulations in a number of states that would require ride-sharing drivers to carry commercial insurance or add additional coverage to their personal policies.

The liability coverage from ride-sharing companies kicks in only after a fare is hailed, leaving ride-sharing drivers at risk of not having insurance coverage when they’re cruising around town waiting for a ride request or running errands.

In North Carolina regulations on these smartphone-based ride-sharing service companies are making their way further through the legislature with continued support of Uber, which is currently the biggest player.

The House Transportation Committee this week backed a Senate bill which would set minimum standards for background checks of potential drivers and company liability coverage on private cars as they transport customers or wait for jobs.

Under the bill the companies would have to conduct local and national criminal background checks on all drivers, pay a $5,000 annual fee to the state, and disclose fares to customers before they request a ride, reported the News and Observer.

Uber, Lyft, Sidecar and other ride sharing operations would have to pay $5,000 annual state permit fees. There are also rules for companies who want to use local airports.

Uber’s general manager in North Carolina spoke in favor of the rules, which she says will help both consumers seeking rides and potential company drivers.

Under current law there are serious insurance concerns about these services when things go wrong. The apps connect users looking for a ride with nearby drivers who are willing to offer a trip in their private cars – often at fares well below what traditional taxis charge.

In the absence of regulations, drivers and their passengers are likely to find themselves uninsured. Most personal vehicle insurance policies are inapplicable if an accident occurs while the car is being used for a commercial activity.

Virginia recently took action against these companies. Under regulations signed by Virginia Gov. Terry McAuliffe (D), the companies must now pay $100,000 for a license to operate in the Commonwealth, provide at least $1 million in liability insurance and abide by a zero-tolerance policy regarding the use of drugs and alcohol by their drivers.

I welcome any moves to close loopholes in this system and to improve insurance coverage.

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