SACRAMENTO -- Online ride-sharing companies will provide more insurance for drivers under a law signed Wednesday by Gov. Jerry Brown, capping a year of intense wrangling between the nascent industry and lawmakers.
A deal was struck just before the end of the Legislature's session last month on AB2293 by Assemblywoman Susan Bonilla, D-Concord. She issued a statement Wednesday saying it protects consumers but also "represents much more than that."
"This measure symbolizes business flexibility, consumer affordability, political compromise and, most importantly, what true public policy should be -- a collective process for all stakeholders to contribute," Bonilla said.
Ride-sharing companies like Uber, Sidecar and Lyft connect passengers and drivers through smartphone apps, but it's not sharing in the casual carpool sense: The passengers pay the drivers, who are considered independent contractors. The new law will let insurers create new commercial policies for the fast-growing industry, and it specifies that personal policies no longer will cover the drivers' commercial activity starting next July.
From the moment a driver turns on the company's smartphone app, the company must provide $50,000 in liability coverage for death or injury to a single person; $100,000 in coverage for all damages in a single accident; and $30,000 for property damage. In addition, $200,000 of excess liability coverage is required when the driver's personal policy is insufficient. The company then must provide $1 million in coverage once the driver is matched with a passenger.
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An earlier version of the bill required up to $750,000 insurance from the moment the app is turned on. The ride-sharing companies had fought back, arguing that's far more than what's required of taxis -- and for a time in which drivers aren't even on the clock yet.
Armand Feliciano, vice president of the Association of California Insurance Companies, issued a statement Wednesday praising the new law.
"Once again California is leading the way in forging public policy to meet the needs of new innovations," he said, adding that Bonilla and Brown "brought stakeholders together and were able to reach a middle ground that most of the parties, including Uber and Lyft, could support."
The state Senate passed the bill on a 30-4 vote, and the Assembly passed it 67-0.
Josh Richman covers politics. Follow him at Twitter.com/Josh_Richman. Read the Political Blotter at IBAbuzz.com/politics.