Ariz. Senate Backs Freedomfor Alternative Transportation ; Says New Ride Servicesshould Not Have to Followrules Applied to Taxicabs

By Fischer, Howard | AZ Daily Star, April 23, 2014 | Go to article overview

Ariz. Senate Backs Freedomfor Alternative Transportation ; Says New Ride Servicesshould Not Have to Followrules Applied to Taxicabs


Fischer, Howard, AZ Daily Star


PHOENIX -- State senators voted 20-8 Tuesday to remove what they said are legal impediments to alternative "transportation services" such as Lyft and Uber, paving the way for them to compete with taxis in Arizona.

In an often-heated debate, supporters agreed that the companies and the individuals who drive for them should not be subject to all the same regulations as traditional taxi firms. Sen. Kelli Ward, R- Lake Havasu City, who is championing these alternatives, said there is no reason for some of the insurance and drug-testing requirements to be applied.

"They're different entities," she said, even if both provide rides.

HB 2262 now goes to the House, which has not considered the issue.

The two companies lobbying for the change, Lyft and Uber, have a business model built on ordering up rides online. Companies then send out messages to individuals who, using their own vehicles, are willing to pick up patrons and, for a fee, take them to their destination.

Passengers pay the fee online, with the company forwarding a share of that to the driver.

One of the big concerns is the question of whether these motorists are actually insured.

Don Hughes, an adviser to Gov. Jan Brewer, said most individual liability policies specifically exclude coverage for commercial activities. He said that could mean a Lyft or Uber driver who hits someone else is actually driving uninsured, leaving no money for a victim, something he said is a concern for the governor.

Ward's proposal seeks to resolve that by requiring the companies to provide $1 million in coverage -- but only from the time they accept an offer from the company until they drop off the fare.

Senate Majority Leader John McComish said that's not enough, saying the drivers are still out, cruising around the streets while waiting for a fare. He said Uber, Lyft -- and any other company that enters the market -- should be required to provide full-time insurance for anyone who drives for them.

But Ward said that ignores the fact that the companies are not operating a fleet of taxis, and that those who pick up passengers are not company employees.

"It is something brand new," she said, adding that the firms are engaged in "creative disruption" of the traditional marketplace "to stimulate things."

Ward said the average driver picks up fares for only about 15 hours a week.

"It allows them to create their own business, to be entrepreneurs, to not owe a taxi company upwards of $3,000 a month before they ever start to make a profit," she said. And Ward said the drivers, making an average of $30 an hour, are contributing to the economy. …

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