Transportation startups Uber and Lyft today announced support for California Assembly bill AB 2293, a measure that will require “ridesharing” companies in California to insure drivers as soon as they log into a ridesharing app to pick up passengers.

Prior to today, Uber and Lyft had aggressively fought the bill for months. However, the opposing sides reached a surprising compromise today: The bill has been amended and now requires ridesharing companies to provide $200,000 in coverage once a driver turns on their app — down significantly from the originally proposed $750,000.

That coverage comes in addition to the required $1 million insurance policy that covers drivers from when they are matched with a passenger, all the way until the passenger gets out of the car at their destination.

This was clearly a tough compromise for Uber.

In a call with VentureBeat back in June, an Uber spokesperson called the proposed state requirements “unnecessary,” and claimed that the bill undermines what it means to be actively “engaged in ridesharing.” At the time, Uber argued that a driver’s personal insurance provided enough coverage when the driver was not actively traveling to pick up and drop off passengers.

By Uber’s original definition, a driver is not engaged in ridesharing until they agree to pick up a nearby passenger. The revised bill changes this definition and could set a precedent for other states if it passes without further amendments; and it likely will with new industry support.

Here’s Uber’s statement celebrating today’s amendment:

Californians loves Uber and lawmakers have heard them loud and clear. Common sense has prevailed and the winners are Californians.

But, here’s what Uber had to say about AB 2293 in June:

AB 2293 is a back-room deal by insurance companies and trial attorneys to prematurely force the ridesharing industry to fit their special interests. The bill allows insurance companies to escape their liability for services they’ve already charged ratepayers, and helps trial attorneys work the system to ensure they get the largest payouts possible. The bill does nothing to enhance safety, yet compromises the transportation choices and entrepreneurial opportunities Uber offers Californians.

Lyft also issued a celebratory statement this evening:

Lyft supports the compromise reached by Senate leadership and stakeholders that provides regulatory clarity for the ridesharing community in California. Given recent amendments in the bill, Lyft has removed opposition to AB 2293 and now encourages support.

Limousine industry advocate Joe L. Jordan offered VentureBeat a colorful response as well:

This is an excellent day indeed for the Limousine Industry!

The more rules and regulations we can pile on the UBER scumbags,
the more we will level the playing field and then we can destroy them
with better cars, better drivers and better service, with no surge
pricing and none of the other illegal and unpleasant activities
associated with UBER and Lyft.

As we said in June, this debate is not new: “It’s the subject of numerous lawsuits and state insurance agency warnings, and it is a key talking point among Uber’s opposition.” Yet in California, the debate may finally be settled.


VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.