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Uber could leave Minnesota if new auto insurance laws are passed

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Minnesota lawmakers are debating a bill that would increase costs for many popular rideshare companies in the Twin Cities – which has one of those companies saying they might just leave the state.

Bills, in both the House and Senate, would require "transportation network companies" (TNCs) such as Uber – where drivers use their personal vehicle to transport people who hail them via mobile apps – to provide a $1 million commercial auto insurance policy for its drivers.

But there's a key difference between each version, that could mean the end of Uber in Minnesota.

The House bill will now go to the House floor for discussion. Its companion bill in the Senate was voted on by the Transportation and Public Safety Committee Thursday night, and referred to the judiciary committee.

Now, this is a complicated issue – so stick with us, and we'll break it down for you.

Is this so long for Uber?

The House bill's sponsor, Rep. Chris Swedzinski, R-Ghent, says the measure assures riders the driver is properly covered by insurance, the Session Daily noted. (Scroll down for the details about the bill.)

But Uber says the bill would be the most strict in the nation if it passed, WCCO reports. Uber General Manager Michael White says the measure is "too far-reaching" and could force the company from doing business in Minnesota, the Session Daily says.

“Overall, we love operating in Minnesota. But this feels like very much that we are being pushed out. We couldn’t operate under the requirements of the bill," White said, according to the Session Daily.

If the bill passes, White argues the state would be setting higher standards for TNCs than for taxis and limousines – the $1 million liability level is about three times higher than what is required of taxis in Minneapolis, White told WCCO.

Uber is asking Minnesotans who use Uber to send letters to their representatives asking them to oppose the measure.

Uber recently announced it would be pulling out of San Antonio, Texas, because the city wouldn't repeal its insurance ordinance, the San Antonio Business Journal reported.

The issue

The State of Minnesota already requires all licensed vehicles to have a minimum auto insurance policy, but supporters of the bill are worried about gaps in insurance coverage when it comes to rideshare programs.

There's personal auto insurance, and then commercial auto insurance.

Some say a driver's private auto insurance company can argue against a claim, if the vehicle is used for a commercial purpose – such as transporting a passenger for money – during the time of the incident. Which would then leave riders and drivers unprotected.

Since the rideshare program exploded onto the scene, some cities – including Minneapolis and St. Paul – have regulated the companies, requiring them to provide a $1 million commercial auto insurance policy for the TNC driver – but only once he or she actually accepts a fare via the mobile app.

The House bill

There's a potential gap between when a driver turns on the app, and when they actually accept a fare.

After much debate this week about how much rideshare companies would be required to insure drivers during that time, the House Commerce and Regulatory Reform Committee voted 11-7 Wednesday to pass the bill with an amendment.

The bill would require these rideshare companies to insure drivers for $1 million during the time the driver has accepted a fare, and while the customer is in the vehicle, similar to the regulations in Minneapolis and St. Paul.

During that potential gap, when the driver turns on the app but hasn't accepted a fare? The required insurance would be much lower – $50,000 in death and injury liability coverage, $100,000 in total coverage and $30,000 in property damage during that time.

But it also requires its drivers to have comprehensive and collision coverage, which Uber argues no driver is required to have.

Stricter bill in the Senate

The Senate measure goes further, requiring the rideshare company's $1 million insurance policy to go into effect simply when the driver turns on the mobile app – a move that signals he or she is willing to pick up a fare.

That means even if the driver hasn't accepted a fare, but is driving around with the mobile app turned on, he or she would be covered by the company's insurance, instead of their personal insurance.

The TNC's insurance company would be required to provide separate insurance policies that include: $1 million in primary liability, $1 million in uninsured and underinsured motorist coverage, as well as collision and comprehensive coverage.

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