If you ride or drive with Uber or Lyft in Georgia, the amount of insurance protecting you is about to decrease – by a lot.
Beginning on July 1, 2023, the amount of underinsured motorist (“UM”) insurance that rideshare companies like Uber and Lyft are required to provide for their passengers and drivers in Georgia is set to decrease. Currently, rideshare companies (technically called “transportation network companies” or “TNCs”) operating in Georgia must provide “uninsured and underinsured motorist coverage of at least $1 million per incident.” O.C.G.A. § 33-1-24(b)((3). However, on July 1, a legislative change made by the General Assembly earlier this year will take effect. After July 1, rideshare companies will only be required to offer UM coverage of “$300,000.00 for bodily injuries to or death of all persons in any one accident with a maximum of $100,000.00 for bodily injuries to or death of one person.” 2023 Georgia Laws Act 70 (H.B. 529).
Let’s put that in context. If you’re the single passenger in an Uber or Lyft, under current law, the rideshare company must protect you with $1 million in UM insurance. After July 1, the minimum will be $100,000 for a single person. In other words, the level of protection will drop by 90%.
UM insurance protects passengers in a vehicle by compensating them for injuries suffered in a collision, regardless of which driver caused the accident. The other common type of auto insurance, liability insurance, is available to compensate people injured by the negligence or wrongdoing of the insured driver. This change in the law affects UM insurance, which can protect both passengers and drivers in certain circumstances.
Lobbying by Uber and Lyft
The rideshare industry lobbied aggressively for this change in Georgia’s law, which is part of a nationwide trend of transportation network companies lobbying for lower minimums of insurance protection. Earlier this year in Nevada, Uber and Lyft successfully lobbied the state legislature to avoid having to provide heightened levels of insurance. Earlier this year in Minnesota, lobbyists for Uber and Lyft successfully removed a requirement for additional insurance from a bill that was making its way through the legislature. In Oregon, Uber and Lyft opposed a bill that would have required rideshare companies to carry the same commercial insurance that taxis must carry. In Colorado, lobbyists for Uber and Lyft successfully amended a bill to reduce the amount of insurance that the rideshare companies would be required to offer. And in New Jersey, Uber won a court case in which the Appellate Division determined that a driver for Uber Eats was not protected by Uber’s UM insurance policies. Malzberg v. Josey, 473 N.J. Super. 537 (App. Div. 2022).
Uber and Lyft are known for their aggressive lobbying. According to The Regulatory Review, Uber and Lyft “have more lobbyists than Amazon, Microsoft, and Walmart combined.” And although the rideshare companies don’t disclose the total that they spend on lobbying, the numbers that they do disclose have been rising – in fact, they set new-high records in 2022. TNCs have been criticized for only disclosing part of their lobbying expenditures. In 2020, Uber disclosed $2.5 million in lobbying expenditures and Lyft disclosed $2.2 million. But that same year, Uber, Lyft, DoorDash, Instacart, and other gig companies spent over $200 million lobbying for a single legal change in California. The full totals of lobbying expenditures are not publicly known.
Rideshare Fares Keep Going Up
To campaign against higher insurance requirements, the lobbyists hired by Uber and Lyft typically warn legislators that if they don’t do as the rideshare companies ask, the companies will raise fares to account for higher insurance premiums. If that doesn’t work, Uber and Lyft may threaten to leave the state or municipality entirely.
Are increased insurance requirements really the cause of rising fares – or is it Uber’s desire for higher profits? Some signs suggest that insurance is not the only factor. For one, the amount of money that rideshare companies spend on lobbying is high, undisclosed, and rising. For another, even as Uber and Lyft have won battle after battle in their fight against higher insurance requirements, fares kept rising.
