Nick Krieger (@nckrieger):
I often write about the Michigan Legislature. I strongly believe that the Legislature passes too many redundant, pointless, superfluous, and wasteful bills.
However, some legislation is necessary to protect the public. For example, Senate Bill 184, introduced earlier this year by Senator Rick Jones (R-Grand Ledge), would clarify that transportation-networking entities such as Uber and Lyft are subject to the same regulations as limousine companies and other car services. Notably, the bill would mandate that Uber and Lyft drivers maintain adequate personal-injury and property-damage insurance to cover themselves and their passengers.
At present, it appears that many Uber drivers do not maintain commercial insurance policies, but rather personal insurance policies only. My personal automobile policy, which is typical of most such policies in Michigan, expressly excludes the payment of benefits “for liability arising out of the ownership or operation of the vehicle while it is being used as a public or livery conveyance.” The phrase “use as a public or livery conveyance” is defined as “[t]he transporting of people and/or goods for hire.” This policy exclusion would clearly encompass the transportation of Uber customers for hire in my personal automobile. Consequently, if I ever decide to become an Uber driver, my automobile insurance carrier will not pay personal-injury benefits to a customer who is injured while riding in my car. And it won't pay me benefits if I am injured, either.
As you might know, under Michigan’s no-fault law an individual must generally seek personal-injury benefits from his or her own insurance company first. This is true even if that individual’s automobile was not involved in the accident. However, many people who rely on Uber and similar transportation-networking services do not have automobiles of their own, and consequently do not maintain personal no-fault policies.
What's more, in the case of vehicles transporting passengers for hire, the law of insurance priorities is entirely different. Michigan law states that “[a] person suffering accidental bodily injury while . . . a passenger of a motor vehicle operated in the business of transporting passengers shall receive the personal protection insurance benefits to which the person is entitled from the insurer of the motor vehicle.” This means that an injured Uber passenger would not recover benefits from his or her own insurance carrier at all, but would be required to pursue the insurer of the motor vehicle in which he or she was riding—in other words, the insurer of the Uber driver. Unfortunately for the passenger, the Uber driver’s personal insurer likely wouldn’t pay benefits for the reasons outlined above.
Uber now claims to offer limited supplemental insurance for its drivers. But it is simply unclear how this supplemental insurance works and what it covers. The moral of the story? You might very well be left without recourse if you are injured in an accident while riding in an Uber car in Michigan.
In many respects, Senate Bill 184 would help Uber rather than hurting it. Many commentators agree that Uber’s current practices are illegal in Michigan, and officials have ordered the company to cease and desist operating in the state. Unless Uber changes its business model, it is only a matter of time before the company is sued for fraud by an injured passenger, shut down completely, or both. Senator Jones’s bill would actually protect Uber by allowing it to stay in business in exchange for complying with Michigan’s insurance laws.
In today's Detroit News, Nolan Finley sings the praises of Uber (http://www.detroitnews.com/story/opinion/columnists/nolan-finley/2015/03/26/finley-nanny-state-gop/70454036/). Finley claims that Senator Jones is not “willing to trust” people to make their own decisions. He also alleges that Senate Bill 184 is based on “a lot of hearsay.” Finley never once mentions that most Uber passengers in this state are not fully covered for accidental bodily injury.
Should we be shocked that Finley has omitted critical details about Uber from his column? Probably not. Perhaps Finley moonlights as an Uber driver on weekends for extra spending money. Or maybe he and his friends rely on Uber for safe rides home after their famous bourbon parties. Either way, it’s natural that Uber drivers and passengers alike are worried that fees will increase if Senate Bill 184 is adopted. They probably will. But this does not change the fact that Senator Jones’s legislation represents a practical attempt to fix a real problem.
It isn't all that often that we hear from Finley on the merits of individual pending bills. Nevertheless, and for whatever reason, he has chosen to lash out against the proposed regulation of Uber—regulation that would allow Uber and similar entities to come out from the shadows and operate within the law.
The Michigan Legislature has now adjourned for its spring recess; lawmakers will spend their Easter holiday with friends and family before returning to Lansing on April 14th. When they do return, however, a river of needless, wasteful bills will once again start flowing through the hopper. I hope Finley speaks out as strongly against these unnecessary future bills as he has against Senate Bill 184.