Despite Commerce Department warning, Jacob Frey says Uber/Lyft ordinance still on its way
Frey: "The draft ordinance is still being rejiggered, but I think we're at a pretty good place where we can kinda fine-tune it."
A few weeks ago, the Minnesota Commerce Department issued a warning to folks considering using so-called "transportation network companies" like Lyft or Uber.
"The Commerce Department wants Minnesotans to know that there may be gaps in auto insurance coverage for both the drivers and passengers using TNCs," the department said in a statement. "There may not be coverage for an accident because most personal auto insurance policies contain exclusions when drivers use their personal cars for a commercial (business) purpose. For example, if you participate in a regular, non-business car pool, you would be covered. If you charge passengers a fee, you may not be covered if you get into an accident."
In sum, the worry is about the distinction between when a driver is covered by their personal insurance policy and when they're covered by a business policy.
"There are questions regarding the limitations of commercial insurance coverage provided by the TNC," the warning says. "[F]or example, when does commercial insurance cover drivers, and whether it includes medical payment coverage, comprehensive, collision, uninsured and underinsured motorist (UM/UIM) coverage, or other types of coverage that are needed to ensure that TNC drivers, passengers, and pedestrians are fully covered."
But Jacob Frey, the Minneapolis City Council member who is taking the lead in drawing up an ordinance to regulate currently unregulated TNC companies (read the article linked above for the backstory), doesn't think the Commerce Department's warning is a big deal.
"We are making sure that the businesses' primary insurance will provide coverage at all times from the click of the app being turned on to the dropping off of the customer," Frey tells us. "We know that individuals' insurance will cover all claims when the app is not on and they're just driving to the store to get bread. What we're working on right now is the in-between time."
"What we're looking at is, it could be the individual's insurance which serves as the primary [during the in-between time] and in the event that doesn't provide coverage, then Uber or Lyft will kick in," he continues. "That's the thought, though it's not definite yet."
Frey says he and his colleagues are swimming in uncharted waters trying to craft an ordinance accounting for ambiguities of that sort.
(For more, click to page two.)
"I don't think there has been an entirely successful regulatory tool that any other city has used," he says. "We're looking at being the first to do this properly -- one, by ensuring safety, but two, by allowing new and innovative businesses to operate and thrive to the fullest extent. It's a great business model, and for us to shut our doors by strangling it with regulation would be dumb, but at the same time it's our job to ensure public safety and a big part of that is making sure that insurance is up to speed and complete."
"We want to put together an ordinance that is good not just for two or three ride-sharing companies," Frey continues. "We want this to be an acceptable ordinance long-term so it accommodates new and different business models, because every company is going to do things slightly different."
Frey says his ordinance should come before a City Council committee on June 3. If it's approved there, it'll go before the full council during its next regularly scheduled meeting.
The plan now is for the council to simultaneously consider two ordinances -- a new one pertaining just to TNCs, along with revisions to the city's existing taxi ordinance.
"From what I'm seeing, the taxi cab industry wants just one ordinance," Frey says. "That's what they're arguing for and just to put it bluntly I don't see that as an option. It is a different kind of business, and as our transportation network expands, as new innovation comes to the city, we have to be willing to think outside the box."
But Frey doesn't think having separate ordinances for TNCs and taxis is a problem.
"There's a difference between fairness and equity," Frey says. "There are parts of the taxi ordinance that in some ways would be more favorable [to the taxi business]. They're different business models and to treat it exactly the same would not be beneficial to either one. There are a few modifications that I think will help the taxi cab industry provide better service that they will appreciate."
Frey also reiterated his belief that it's about time the taxi industry was spurred to evolve.
"Competition is a good thing," he says. "I think the whole model needs a facelift and this is a swift kick in the pants to do so."
-- Follow Aaron Rupar on Twitter at @atrupar. Got a tip? Drop him a line at email@example.com.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss City Pages' biggest stories.