Thursday, June 26, 2014

State Senate Committee on Insurance Votes for $750,000 Partial Coverage for TNCs

The bill, AB2293, that the committee passed on for a later vote on the Senate floor was disliked by almost everybody.

Uber and Lyft lawyers spoke against it because they want to limit coverage to only the time when their drivers are logged in with a passenger. They do NOT want to cover their drivers while they are logged in but don't have a customer. This makes economic sense. In that way the TNC's would save money on insurance premiums and wouldn't have their rates raised the next time one of their drivers kills a pedestrian while looking for a fare.

Taxi people spoke against the bill for several reasons:
  • It drops coverage from $1,000,000 to $750,000.
  • TNCs would not be covered if they pick up off the street or carry private customers.
  • As to whether or not a driver was logged in when an accident occurred could be manipulated by either the driver or TNC companies like Uber & Lyft.
  • Full-time commercial insurance is the only safe option for the public.
  • The bill would codify "TNC" as a separate form of transportation than what already exists. It would create a new category of "charter party carriers" and pre-empt the court challenge of the CPUC's decision by the Taxi Paratransit Association of California (TPAC), which is already in the California court of Appeals.
Oddly enough one of the main speakers in favor of the bill was Chris Dolan, the attorney for the Sophia Liu family. I wasn't in the room when Mr. Dolan spoke but I think he favored the bill because, had it been in effect when the Uber driver killed Sophia Liu, she and her family would have been covered.

From here on things get a little complicated. AB 2293 will go to the Senate Appropriations Committee in August and then to the full floor of the Senate. The bill can still be amended before the Senate vote. If it passes, it goes to the Assembly for a final vote where it can only be amended by the author of the bill. 

There was a strong turnout by drivers from all over the bay area. Desoto Cab and other companies sent cabs to the State Capitol in what was supposed to be (and sometimes actually was) a caravan. When we reached Sacramento we met up with many Sacramento drivers and several others, some of whom came from as far away as Milpitas. We drove around the State Capitol building before going into the hearings. Somewhere between 100 & 200 taxicabs took part and, contrary to news coverage, most of them did not honk their horns.

Small Victory?

The San Francisco Business Times called the vote a "big defeat" for Uber & Lyft but, unless you categorize any defeat by the faux taxi twins as big, this overstates the case. Aside from the criticisms mentioned above, the bill fails to deal with the negative environmental impact and gridlock caused by turning thousands of amateur, poorly vetted drivers loose on the streets. In addition, the committee tabled AB 612 which would have required Uber & co to fingerprint their drivers as part of their background check. It is possible that AB 612 may be amended and voted on at a future date.

Then again maybe any defeat of Uber et al is a cause for celebration. They've been running the table up until now. At least the next person who gets hit by a logged-in TNC should be covered without argument.

The bill is also a sign that the garbage these techie snake-oil salespersons have been feeding the public is no longer being swallowed whole.

A John Zimmer Award Winner

This prize is named after Lyft CEO John Zimmer and is given the person or persons who makes the most preposterous assertion or assertions in the category of doublethink. The list of John's ridiculous statements is too long to go into here but Zimmer's continued claim that Lyft does safer background checks than taxicabs despite the fact that he's too cheap to pay for fingerprinting should suffice to give you the idea.

The winner of the Zimmer Award for these hearings is Uber representative Eva Behrend (photo below right) who, in reference to Uber's refusal to pay for the death and injuries to the family of Sophia Liu caused by Uber's driver (which so far have exceeded $185,000 for Mrs Liu alone), told the press:

1. "... Uber carries the best insurance in its class..."

2. "I can say that there is no gap in insurance coverage for Uber."

2.a. This may be in reference to a previous falsehood given by Uber at the recent CPUC hearing on insurance. In order to argue that there was no "gap" in their coverage, Uber wrote that the insurance company carrying the personal liability insurance for the Uber driver in the Liu death had paid their part of the claim – which would have been $15,000. This was a blatant lie. According to  attorney Chris Dolan, nothing has been paid to the Liu family.

4. Ms. Behrend also said that Uber has the best insurance of anybody.

In any case, Eva, you've earned your award by keeping alive the Uber, Lyft & Sidecar tradition of deceit in advertising. Congrats.

Photos and of the drivers in the caravan and the protest ...


  1. The CPUC read the taxi-paratransit association's brief, their lawyers told them it was a winner on the issue of jurisdiction (prearranged service just like limos my ass), and cities rather than the CPUC have the authority under current common and statutory law to regulate TNCs, (or more important to the CPUC's POWER hungry, incompetent but billionaire-corporate friendly commisioners --see PGE, Uber/Ron Cowan , it would lose its POWER to regulate then. So call up a friendly legislator to amend the code so the PUC can retain its POWER. I don't see the PUC limiting the number of TNC's on the streets of SF or LA like the city of Seattle did, or ending the elastic fares system undercutting cabs or surge pricing. Mayor Lee may not be our friend, but he is more vulnerable than an unelected PUC on the state level. In sum, the bill must be defeated at all costs. Just my opinion.

    1. this is a good argument, the bill must be defeated so that power to regulate remains local, otherwise it will take another state bill to return local control if that would even happen


    Uber and the appropriation of public space

    The debate over technology and disruption is a red herring, writes Glenn Fleishman. The trouble with Uber is that it's a middleman that can control both ends of the market.

  3. Actually, last week, Seattle's mayor and city council voided the law limiting the number TNC drivers operating TNCs at any one time. According to the new article public pressure, lobbying, and public relations forced the Mayor to "negotiate" with the interest parties which resulted in non limitation of the number of TNC drivers and TNCs at any one time. But the cab drivers and industry "won" something too--the city dropped its dress requirement for cab drivers. The Ubers were gloating.