Now, Washington is preparing to do the same.
Cyrus Habib, a Democrat who represents the 48th District and sits on the state’s transportation committee, tells GeekWire that he plans on introducing legislation in time for the next session that starts in January 2015.
In the meantime, Habib said that he’s bringing stakeholders together to figure out how exactly Washington state should regulate the new transportation startups that are challenging the taxi industry.
The primary area of concern relates to insurance, which Habib said is a “state issue.” In California, lawmakers are forcing companies like Lyft — also known as transportation network companies (TNC) — to increase their insurance standards.
“We are working with companies, driver representatives, local government, the insurance industry, and insurance commissioners to develop a comprehensive policy that will give people the assurance and sense of comfort that their safety is being protected,” Habib said.
Habib wants to make sure the state’s insurance regulations clear up any ambiguity regarding how drivers and passengers are covered in terms of personal vs. commercial and dollar amounts. He noted four phases — when a driver has signed up for something like Lyft, but doesn’t have the app on; when a driver has the app on, but has not accepted a trip; when a driver has accepted a trip, but has not picked up the passenger; and when the passenger is in the car.
Habib said that phase two — when a Lyft or UberX driver has the app on, but has not accepted a trip — creates the most confusion in terms of differing between personal and commercial insurance coverage.
“The sharing economy really does challenge us to think in some new ways, because what’s really going on is people living a hybrid of a commercial and personal life at any given time,” Habib said.
Those gaps were discussed in depth by the Seattle City Council, which enacted its own insurance regulations back in June for a “provisional period” that will end if and when the state enacts new laws early next year. The City’s concern with the potential gaps forced the TNCs to up their insurance standards for that “phase two” during a negotiation process set up by Mayor Ed Murray.
Habib, who has been legally blind since age 8 and was the first Iranian-American elected to state office in the U.S., believes that insurance companies will come up with new coverage policies aimed at people working in the sharing economy.
“I do think that innovation in the insurance market will come,” he said.
There are no plans to create a state-enforced TNC license, Habib said. However, he is looking into lifting a Labor & Industries insurance fee for taxi drivers — TNC drivers do not pay an L&I fee.
“No other sole proprietor is required to buy L&I for him or herself except for taxi and limo drivers,” Habib said. “It’s a huge cost.”
Aside from the L&I payment, Habib is in favor of reducing other regulations for taxi drivers — while also accommodating for the new market entrants.
“I want to keep regulations as low as possible while making 100-percent sure we have protected the public, passengers, and drivers in the rare and regrettable instance of some kind of accident,” he said.
Habib added that “taxis still play a very important role” for people who may not have a smartphone, or don’t like using the TNC services. But, as we’ve noted in in the past, he also welcomes innovation to the transportation industry.
“It’s my belief that we do better when there are multiple choices out there,” he explained. “For some people, you want to send a package with USPS. Just because we have private couriers and delivery services doesn’t mean we get rid of the Postal Service. They play an important role and I would not like to see them done away with. But we’re not going to protect them by limiting innovation.
The key is to support innovation, but also allow the taxi drivers to innovate and help them get out of these burdensome regulations.”