Ride-sharing services get the green light, but will insurers follow?
SACRAMENTO – California regulators recently gave a go-ahead for Lyft, Sidecar and other services to provide ride-sharing to smartphone users.
Now, it’s up to the insurance industry to develop products to meet a requirement that drivers and passengers be covered for $1 million in damages per accident.
Ride-sharing services connect people who need lifts with car owners who want to pick up a few bucks. But almost no private passenger car insurers cover a vehicle used as an unlicensed taxi.
“I think it’s clear that when a driver using a personal vehicle carries passengers for compensation, their personal insurance will no longer cover them or their passengers,” said Public Utilities Commissioner Michael Florio just before the agency approved first-in-the-nation safety rules for ride-sharing.
According to Lyft spokeswoman Erin Simpson, her company already has bought “a first-of-its-kind” policy from an insurance company that meets PUC requirements.
But major state-licensed insurers, such as State Farm, aren’t yet rushing into the market. “We’re in the early stages of determining what to look at,” said Robert Passmore of the Property Casualty Insurance Assn. of America. One challenge, he said, is figuring out when a vehicle is driven for an owner’s personal use and when it’s hauling paying customers.
Adds state Insurance Commissioner Dave Jones: “Insurance products and insurance regulations need to evolve as the sharing economy grows.”
Want some black-market cigarettes, cheap?
Smokers may soon get that solicitation if voters or lawmakers pass a proposed $2-a-pack tax hike, according to a study released by a California Chamber of Commerce affiliate. The trade group includes major tobacco companies and retailers.
About 1 of 5 cigarettes consumed in 2011 in California — where a pack costs less than $5.84, which includes 87 cents in taxes — was smuggled from out of state, said the study by Andrew Chang & Co., a Sacramento research consultant.
Raising the price to nearly $8 would almost double the smuggling rate to 39%, about 440 million cigarettes a year, the study says.
The report provides ammunition for opponents of a tax-hike bill pending in the Legislature or a possible initiative campaign, said Loren Kaye, president of the California Foundation for Commerce and Education. “We don’t want to see increased taxes, which leads to more crime and more smuggling,” he said.
The findings are propaganda, said Kimberly Amazeen of the American Lung Assn. “It’s the tobacco industry saying and doing anything it can to protect its profits and keep cigarettes affordable for kids.”
Craft distillers, who make exotic vodkas, gins, whiskeys and other spirits, are raising their glasses. Gov. Jerry Brown just signed a bill giving them the right to charge visitors a small fee to taste their wares.
“We can finally begin building our dream tasting room,” said Melkon Khosrovian, co-founder of Greenbar Distillery in downtown Los Angeles.
The new law, however, was not all that distillers would have liked. They failed to get approval to sell bottles in the tasting rooms.
Large liquor distributors objected to craft distillers selling their own products. And some anti-alcohol groups complained that the tasting rooms would be unlicensed bars.
The view from Sacramento
Sign up for the California Politics newsletter to get exclusive analysis from our reporters.
You may occasionally receive promotional content from the Los Angeles Times.