Car-sharing platform Turo advocates for a bill that would lower insurance requirements for its services
In the bustling city of New York, a new bill is making waves in the car-sharing industry. The bill, sponsored by state Sen. James Skoufis and Assembly Member David Weprin, aims to treat car-sharing companies like traditional rental car companies regarding liability coverage.
The driving force behind this proposed legislation is Turo, the largest car-sharing company operating in New York. Turo has been lobbying on the issue for several years and has spent over $100,000 on lobbying between January and April this year alone.
Under current law, car-sharing companies like Turo must provide supplemental liability insurance of at least $1.25 million, while traditional rental car companies do not have this requirement. Turo's spokesperson has stated that the high cost of insurance in New York is pushing the peer-to-peer car-sharing industry out of the state.
The bill could potentially lower the liability coverage as low as $25,000, a significant decrease from the current requirement. This change could have big implications for the industry, with other car-share companies like GetAround having left the state last year due to costs related to insurance requirements.
Opponents of the bill argue that reducing the liability coverage could endanger people on the road. They emphasize the need to maintain sufficient insurance coverage to protect consumers, vehicle owners, and third parties from financial risk. Current insurance coverage requirements, such as those stipulated in section three of New York’s financial responsibility laws, ensure liability limits are adequate.
However, proponents focus on regulatory clarity and market facilitation with reasonable insurance requirements. They argue that clear regulatory frameworks tailored to P2P car sharing foster innovation, consumer choice, and market growth. An example of this can be seen in South Carolina's recently enacted bill (S.307), which created specific legal guidelines, including insurance requirements designed for P2P car sharing, enabling companies like Turo to operate confidently while protecting users.
The debate centers around balancing consumer protection with fostering P2P car sharing market growth. While similar model laws adopted by 28 states have struck compromises on insurance and liability matters, New York stakeholders may differ on the appropriate level of mandatory coverage.
It's important to note that Turo has a history of operating in New York, but it temporarily suspended its operations in 2013 due to regulatory issues. Following the approval of a law that specifically regulates the industry and established a $1.25 million liability insurance requirement in 2021, Turo and other car-share businesses returned to New York.
The bill could also have big implications for ride-share giants like Uber, as it would remove the requirement for additional insurance for car-sharing companies. The exact impact of this bill on consumers, car owners, and the industry as a whole remains to be seen, as the bill is still under consideration by the New York legislature.
- The proposed legislation in New York, if passed, might not only affect the car-sharing industry, but also the business sector of ride-share giants like Uber, as it may remove the requirement for additional insurance for car-sharing companies.
- The debate in New York revolves around balancing consumer protection with fostering the growth of the peer-to-peer car-sharing market, with proponents advocating for regulatory clarity and market facilitation through reasonable insurance requirements, while opponents emphasize the need to maintain sufficient insurance coverage to protect all parties involved.
