New law regulates Uber’s ridesharing services in Maine
A new Maine law that became effective on June 30 addresses concerns raised about insurance and safety requirements for Uber, the smartphone-based ridesharing service that began operating in Maine last fall.
Prior to enactment of “The Transportation Network Company Insurance Act,” the lack of statewide regulations put Uber and similar ridesharing services at the mercy of potentially numerous individual regulations enacted by individual Maine towns and cities. Uber, a San Francisco-based company that provides app-based ride services in more than 300 U.S. cities and in 58 countries, officially started service in Portland on Oct. 2. It launched additional operations in Bar Harbor, Old Orchard Beach, Ogunquit and Kennebunk earlier this summer.
Sponsored by Waterville Rep. Henry Beck, D-District 26, and enacted as an emergency bill, LD 1379 is based on a national agreement Uber and other TNC companies such as Lyft had reached this spring with Allstate, American Insurance Association, Farmers Insurance, National Association of Mutual Insurance Companies, Property Casualty Insurers Association of America, State Farm and USAA.
The law requires Uber to pay a $10,000 yearly fee to Maine for its statewide permit. It also establishes driver qualification requirements and prohibits municipalities from adopting their own ordinances or regulations governing Uber and similar ridesharing services.
In an Aug. 11 news release about the new law, Eric Cioppa, superintendent of the Maine Bureau of Insurance, highlighted several of the new law's insurance-related requirements:
• $1 million minimum in bodily injury, death and property damage coverage while “engaged in a prearranged ride.”
• A minimum of $50,000 per person and $100,000 per incident for bodily injury and death, and $25,000 for property damage while a driver is logged into the TNC's digital network but there is no passenger in the car.
• At least $2,000 medical payments coverage at all times.
Cioppa said in the release that drivers for Uber and other so-called transportation network companies should keep in mind that these coverages are liability coverages and do not cover damage to a driver's vehicle or the driver's personal injury or death. He also advised TNC drivers and those thinking of becoming TNC drivers to consider these additional points:
• These mandatory coverages can be provided by the TNC, the driver, or a combination. Drivers need to read their TNC contract carefully to determine who is providing the required coverage.
• Insurance companies providing personal auto insurance in Maine may exclude coverage for losses incurred when a driver uses his or her vehicle for income-related purposes. The new law reiterates this right. TNC drivers will have to know if this coverage is available through the TNC or their own personal automobile policy. If not, drivers should ask their personal auto insurer if TNC coverage is available by endorsement. Otherwise, drivers need to purchase their own commercial auto insurance in order to comply with the law.
• Most vehicle loan agreements do not allow borrowers to transport passengers or goods for hire. Violations may lead to default under a vehicle loan even if the loan payments are up-to-date.
“A driver for a TNC who does not have the proper coverage is at considerable personal risk,” Cioppa said in the release. “Anyone driving for Uber or a similar company in Maine, or considering doing so, should contact his or her insurance agent or company to understand what is required to comply with Maine's financial responsibility law.”
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