2014 Laws for Transportation Network Companies (TNCs) and Drivers

This is a compilation of my notes on key regulation of Transportation Network Companies (TNCs) and TNC Drivers reported in various insurance industry communications during 2014.  I share it with you as a point of reference covering many key developments being closely watched by the private passenger auto insurance carriers, as the exposure to adjust, defend or pay claims arising out of TNC use or similar commercial use of private passenger autos is not a risk typically anticipated or intended by insurers issuing personal auto policies.


Insurance Journal reported December 18, 2014, that France, Spain and Thailand have banned some or all Uber services. The company’s services have also been banned in New Delhi following an allegation of a rape by an Uber driver.  The Insurance Journal also reported Uber replied on-line that in the United States, Uber’s background-verification process includes checks of court records going back seven years; a multi-state criminal database; and the National Sex Offender Registry.

Bloomberg.com reported December 10, 2014 that:

  • A judge in Spain banned Uber from operating in the country.
  • Rio de Janeiro declared Uber illegal.
  • The Neatherlands halted ride-sharing service UberPop.
  • New Delhi banned Uber after one of the service’s drivers was accused of raping a passenger.


Bloomberg.com reported December 10, 2014 that Uber was sued by the district attorneys in Los Angeles and San Francisco over claims that Uber makes false assurances to customers about drivers’ background checks.

AB 2293 becomes effective July 1, 2015.  Synopsis of some of the key provisions:

  • Public Utilities Code (PUC) 5431(a) states: A “transportation network company” (TNC) is an organization operating in California that provides prearranged transportation services for compensation using an online-enabled platform to connect passengers with drivers using a personal vehicle.
  • PUC 5432 TNC Driver Disclosure Requirements provide a TNC shall disclose to drivers:
    • The limits the TNC provides while the driver uses a vehicle in connection with;
    • The driver’s personal auto insurer will not provide coverage ;
    • The driver’s personal auto insurer will not provide Comp or Collision coverages from the moment the driver logs on to the TNC platform to the moment the driver logs off the TNC online-enabled platform.
  • TNC policy will be primary (“first dollar of a claim”) if the driver fails to have TNC insurance.

PUC 5433 requires the following insurance liability limits and coverage periods for a TNC:

  • Primary $1 million in liability BI/PD coverage which applies from the time the driver accepts a ride request on the TNC app until the time the driver completes the transaction on the app or until the ride is complete, whichever is later. This requirement may be satisfied by insurance maintained by the TNC or the driver, or a combination of both.
  • Primary $50/100/30 in liability from: (a) the time the driver logs on to the platform until the time until the time the driver accepts a request to transport a passenger; and (b) from the time the transaction or the ride is complete, whichever is later, to the time the driver either accepts another ride or logs off of the app. This requirement may be satisfied by insurance maintained by the driver, or the TNC. The TNC must also maintain $200k per occurrence for excess liability arising from a driver using a vehicle in connection with a TNC’s app which exceeds 50/100/30.
  • Summary of TNC required liability coverage limits and time periods:
    • Driver logs on to app until accepts a ride: $50/100/30 plus $200k excess.
    • Driver accepts ride on app until the transaction or ride is complete, whichever is later: $1 million.
    • Transaction or ride is complete, whichever is later, until the driver logs off the app: $50/100/30 plus $200k excess.
  • TNC UM/UIM limits: The TNC shall provide $1 million in UM/UIM Coverage from the time a passenger enters the vehicle until the passenger exits the vehicle. The policy may provide coverage for any other time period “if requested by the driver relative to insurance maintained by the driver.”
  • Nothing in AB 2293 or the relevant PUC provisions for TNCs require a private passenger auto insurer to provide primary or excess coverage from the time the driver logs on to the app until the time the driver logs off the app, or the passenger exits the vehicle whichever is later.
  • A TNC passenger has a right of privacy, and a TNC may not disclose third party passenger information unless the customer consents or pursuant to a legal action or PUC investigation.

 March, 2-14, the San Francisco Business Times reported that a company named Breeze (formerly “Zephyr Car”) rents $20-a-day cars plus 25 censts a mile to UberX and Lyft drivers.  Breeze was founded in early 2014 by former employees of Uber, Homejoy, Twitter, and Google and is backed by Mark Cuban.


Colorado enacted SB 125 (effective 9/4/2014) regulating rideshare companies (also known as Transportation Network Companies, or TNCs).  Generally, this bill [CO 14-125] provides:

  • Requires $1 million primary liability coverage during the “pre-arranged ride” (defined as when the driver and rider are matched).
  • Requires primary liability coverage of at least 50/100/30 for the time period a driver is logged on to a digital network, but not engaged in a pre-arranged ride (commonly referred to as the “gap period”).
  • Requires the TNC to provide certificates of coverage to the PUC or verify their drivers have the procured appropriate policies that comply with the provisions above.
  • Specifies a personal auto policy does not have to provide coverage while a TNC driver is logged into a digital network.

Notably, the bill does not address potential gaps with the drivers personal auto coverage such as damage for the drivers auto, UM and UIM, and medical payments coverage. The Colorado bill only addresses liability coverage.


  • GA HR 1830 was a resolution passed during the 2014 session that created a study committee on the topic of ride-sharing. The study committee held three days of hearings regarding insurance coverage issues. The study committee is chaired by House Public Safety Committee Chair Alan Powell (R). Reportedly, he plans to introduce legislation in 2015 that may address driver background checks, vehicle inspections, tax collections and insurance issues.
  • House Insurance Chairman Richard Smith has been reported to be separately working with interested parties to craft an insurance specific bill regarding TNCs.


The city of Boise, Idaho sent Uber a cease and desist letter December 24, 2014, because Uber ignored its promise not to operate within city limits while negotiating an operating agreement for the rideshare company.  Officials encouraged people to avoid using the company, reportedly stating “It is very important to us that their cars, their drivers are safe and operating and that there have been background checks for their drivers.” City officials wanted Uber to work under regulations that other Boise cab services do, meaning they would insure their vehicles, offer complaint options for passengers and undergo routine vehicle inspections.


Early in December, 2014, Portland, Oregon, officials sent a cease-and-desist order to Uber for not complying with city regulations.


In July, 2014, the City of Columbus adopted a “vehicle for hire” ordinance regulating “peer-to-peer transportation network companies” and specifically requiring TNC drivers to pay a $25 annual license fee and provide copies of background checks, driver records and vehicle inspections.  Each TNC company would have to pay a $500 annual license fee, as well. The city will not license drivers younger than age 21 under this ordinance.   The rules also would prohibit drivers from soliciting customers on the street.


The PA PUC approved emergency use applications the week of July 21, 2014, to Uber and Lyft provided they certify that:

  • They provide primary insurance during the “app on” period; and
  • Drivers notify their personal auto carriers of their intent to provide ride sharing services.


December 16, 2014, Claims Journal reports:

  • San Antonio has approve rules for regulating ridesharing companies such as Lyft and Uber. The regulations require commercial insurance, fingerprint background checks for drivers and inspections for vehicles [effective 3/1/2015].
  • Dallas City Council has updated a transportation ordinance so ridesharing companies must have insurance. Lyft and Uber drivers in Dallas must also have an operating permit, a valid driver’s license, limited traffic violations and undergo background checks. All vehicles also must pass inspection [effective 4/30/2015].


The VA Dept. of Motor Vehicles issued temporary authority to operate in August 2014 to Uber and Lyft, on the strength of arguments that these TNCs will serve communities that are not otherwise served by certificated carriers, subject to guidelines that:

  • Require $1 million primary liability coverage from the time a trip request is accepted until the passenger exits the vehicle.
  • Require primary liability coverage of at least 50/100/25 for the time period a driver is logged on to a digital network, but not providing services.

The information contained in this blog is intended to educate members of the public generally, and is not intended as legal advice. The contents of this blog is a compilation from other sources, and The Nash Group does not warrant, endorse, or bear responsibility for these materials.  For solutions for specific problems or advice on any of the related topics, engagement of The Nash Group is established only upon completion of a mutually signed engagement agreement.


Copyright © 2015. The Nash Group LLC.