California Insurance Commissioner Dave Jones said that car-booking services like Uber Technologies Inc. should provide coverage to reimburse victims when nonprofessional drivers in their networks are involved in crashes.
Jones also named Lyft Inc. and Side.Cr LLC in a statement recommending that the companies have $1 million of commercial liability coverage starting from when a driver switches on one of their mobile apps. He urged the California Public Utilities Commission to amend regulations to fill insurance gaps.
The startups connect vehicle owners with strangers looking for a ride.
Such networks are “encouraging nonprofessional drivers to use their personal vehicles to drive passengers for a profit—a risk which personal automobile insurance simply does not cover,” Jones said in the statement. “Our recommendations will ensure there is insurance protection for passengers, drivers and pedestrians.”
The networks have drawn scrutiny as their popularity increases. Uber, which counts Google Inc.’s venture-capital arm among its investors, has faced criticism in some cities for using drivers who don’t have taxi or limousine licenses. Uber was sued in January by the parents of a six-year-old girl killed in San Francisco by a driver linked to the company.
Uber said Jan. 1 that the driver was “a partner of Uber” who wasn’t providing services on the company’s system during the time of the accident.