Getting around and getting a room has changed a bit in recent years thanks to the growth of companies like Uber and Airbnb. But what if there’s an accident? Florida Senators are working on an answer.
If you do it right, being a middleman can be very profitable, and running social networking platforms is no exception. But one of the most recent iterations in social-driven business—the so-called sharing economy—downplays profit, at least when it comes to the company. Instead, it emphasizes the user—want to make a few bucks lending out that parking place, power tool, or bike you aren’t using? The headline grabbers in this space are companies like Uber and Airbnb, but new ventures seem to be popping up every day.
One of the considerations they have in common is insurance. While people are renting out their house, their coverage often takes a vacation. It’s the same story for most auto policies. So Sen. David Simmons (R-Altamonte Springs) has drafted a proposal requiring ride share and short-term rental companies to get insurance to cover the gap.
“This is simply a case in which we are setting forth minimum requirements relating to insurance so that our laws keep up with technology,” Simmons says.
Many companies are already offering some level insurance. When it comes to housing, Airbnb hosts in the U.S. get supplemental insurance coverage as part of the deal. Another short-term rental company called HomeAway will sell its hosts policies specifically for vacation rentals.
On the transportation side, Uber insures its drivers throughout an assigned trip. And Simmons’ bill mirrors that policy.
“I think our goals here are aligned,” Uber official Ceasar Fernandez says, “in that we all want to have insurance policies that protect people and have the highest standard of insurance for our drivers on the road today.”
But, Fernandez concludes, “Uber Technologies opposes the bill as it stands.”
The company’s opposition comes from an additional insurance requirement in Simmons’ bill. Although Uber carries insurance for the duration of a trip, that coverage disappears as soon the rider is dropped off. Simmons wants companies like Uber to carry a lower level of insurance for the time drivers spend ‘on call’. Fernandez argues that’s not commercial activity and so the driver’s personal policy should apply.
“The period that we frankly have some type of contention with in the Senator’s bill is when an individual driver’s application is on, but he is not transporting a passenger,” Fernandez says. “We do not believe that is commercial activity, we do not believe that that period should be covered at the same rate as vehicle-for-hire companies.”
Taxi companies have stridently opposed the expansion of Uber, but that doesn’t necessarily mean they support Simmons’ proposal. Brock Rosayn of Metro Taxi in Palm Beach County says there’s still room for improvement. He says policies taken out by transportation network companies, or TNCs, like Uber aren’t as good as they seem.
“Uber’s and Lyft’s insurance company is not a member of FIGA which protects consumers when insurance company becomes insolvent,” Rosayn says. “Even an A-rated insurance company with large assets become insolvent. There are large gaps in these TNC policies. In the interest of consumer protection there is more work that is needed on this bill.”
FIGA is the Florida Insurance Guaranty association. Simmons’ bill passed the Senate Banking and Insurance committee unanimously.
