Who’s insured? App-based trip request services raise new coverage questions

Uber and other transportation network companies are popping up as an alternative to the traditional taxi service. However, some say it’s drive or ride at your own risk, as there could be a question as to liability coverage if the driver, operating on TNC time, is in a wreck.

Using their private vehicles, TNC drivers with a special phone app are able to be connected with riders registered with the service and looking for a ride.

Rep. Chris Swedzinski

Rep. Chris Swedzinski (R-Ghent) sponsors HF1783 that would outline insurance responsibility for the privately-owned vehicles, so riders can be assured the driver is adequately covered.

But Uber General Manager Michael White warned the House Commerce and Regulatory Reform Committee Tuesday that the bill is too far-reaching and could force the company from the state. After contentious testimony, the bill was held over until Wednesday’s scheduled 2:45 p.m. meeting with the hope that the sides can reach a compromise.

As proposed, the bill calls for participating drivers to have varied insurance including $1 million in primary liability, $1 million in uninsured and underinsured motorist coverage, as well as collision and comprehensive coverage. If the driver would not have the coverage, the transportation company would be required to provide it.

Commerce Commissioner Michael Rothman said he was so concerned about the current coverage ambiguity for TNCs, that he posted a consumer alert on the department’s website.

“TNCs are an important innovative businesses, and we very much encourage this business development,” Rothman testified. But, he cautioned, there are possible gaps in insurance coverage that could leave both the driver and rider unprotected. There could be a dispute about private insurance coverage while a vehicle is used for commercial purposes.

Swedzinski’s bill would require a TNC to disclose to its drivers, in writing, the auto insurance requirements and the liability coverage the company provides. It would need to advise the driver that personal auto insurance may not provide coverage when the driver is using the vehicle for transportation service.

But White said the bill puts the company’s plans here in reverse because the state would be setting a higher standard for the TNCs than it has for taxis and limousines. “Overall, we love operating in Minnesota. But this feels like very much that we are being pushed out. We couldn’t operate under the requirements of the bill.”

He said the amount of insurance coverage required is higher than in any other state or jurisdiction in which the company operates. “We feel it’s an attempt to keep us from operating in Minnesota.”

Committee Chair Rep. Joe Hoppe (R-Chaska) had intended the bill be moved to the House Floor, but he noted there is still a lot of work to be done.

“Everyone gets it that it is not ready for the floor. Let’s try to get a compromise worked out, and vote the bill out of here.”

The companion, SF1679, sponsored by Sen. Kari Dziedzic (DFL-Mpls), awaits action by the Senate Transportation and Public Safety Committee.