Legislation regulating so-called “transportation network companies” in California passed the state Senate Energy, Utilities and Commerce Committee by a unanimous 8-0 vote earlier this week, amid a row between the TNCs, insurance companies and traditional taxicabs.

This bill, A.B. 2293, stems from a tragic New Year’s Eve incident in San Francisco in which a six-year-old girl was struck and killed in a crosswalk by a driver who was an UberX contractor.

Under the bill, which moved now to the Senate Insurance Committee, TNCs would be required to provide primary insurance for any driver currently logged in to use their service. The measure codifies the California Public Utilities Commission’s proposed minimum of $1 million of coverage.

The measure is sponsored by Assemblywoman Susan Bonilla, D-Concord, who said she presented the bill to fill a “gap” in insurance coverage and consumer protections, create clear definitions of when commercial and personal insurance coverage is primary, and ensure all drivers are adequately covered during all periods of TNC services.

Bonilla’s legislation defines three distinct “periods” of TNC service, between when a driver turns the application on to when it is turned off.

  • Period 1: The driver turns the app on and waits for a passenger match
  • Period 2: A match is accepted, but the passenger is not yet picked up
  • Period 3: The passenger is in the vehicle

Insurance industry groups argue that the TNCs must be required to provide primary coverage for all three periods. For their part, the TNCs argue that during Period 1, a driver is not active and should not be required to carry the higher coverage standard demanded during the other two periods.

In addition to insurers, the bill also is supported by consumer attorneys, the California Airports Council and the San Francisco International Airport, who each argued for the measure on public safety grounds.

TNCs like Uber and Lyft raised opposed the $1 million minimum as too high and insisted the bill is anything but a compromise. Many Lyft and Uber drivers showed up to voice their opposition, most implying that A.B. 2293 would shut down the TNCs and therefore their livelihoods.

The other source of opposition came from taxi cab associations, who decried the bill for codifying TNCs as different from cab companies and subject to different regulations.

Committee Chairman Alex Padilla, D-Los Angeles, expressed support for the measure overall, although he felt it should be subject to further negotiation. He said he feared requiring $1 million coverage during all periods might be too high, but felt that was a matter on which the insurance committee should rule.