Tougher insurance requirements for high-tech ride-sharing companies operating in California got the go-ahead from a Senate Insurance Committee on Wednesday.
As proposed, the new transportation companies would need to make sure their drivers and their personal vehicles have at least $750,000 in insurance coverage any time they're waiting to be matched up with a passenger via a smartphone application.
The vote was 7-1 and the bill, AB 2293 by Assemblywoman Susan Bonilla (D-Concord), now goes to the Senate Appropriations Committee.
The bill seeks to encourage the kind of "sharing economy" innovations that have been pioneered by Uber Technologies Inc., Lyft and other firms.
Bonilla, backed by the committee chairman, Sen. Bill Monning (D-Carmel), said the stronger protections would require ride-sharing firms carry sufficient insurance to cover injuries and property damage suffered by drivers, passengers, pedestrians and other vehicles.
"The committee's primary responsibility is to make sure the public is protected and there is a level playing field," Monning said. "It's not the role of the committee to stand in the way of innovation" or get in the middle of commercial competitors.