A message from Broward Commissioner Beam Furr regarding Transportation Network Regulations

default-event-avatar A message from Broward Commissioner Beam Furr regarding Transportation Network Regulations
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default-event-avatar A message from Broward Commissioner Beam Furr regarding Transportation Network Regulations
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0713UPSHOT-master675 A message from Broward Commissioner Beam Furr regarding Transportation Network Regulations

 

 

Greetings Hollywood,

Uber has been a hot topic in recent weeks. There has been no shortage of editorials, articles and even direct mail pieces discussing the County’s actions with regards to Uber. I want to take the additional step of bringing you into the County’s decision making process, to show you what we decided and how we got there.

At the April 28th Broward County Public Hearing, the Board of County Commissioners voted to update and expand the County’s Motor Carrier Ordinance. This item sparked a lot of attention, and our office received many calls and emails. The new ordinance provides the framework to allow Uber and other Transportation Network Carriers to operate legally within Broward County.

The County voted to include background checks, vehicle inspections and insurance requirements for Transportation Network Carriers.

Background Checks

All Uber and Taxi Drivers will:

  • Provide their fingerprints to Broward County.
  • Register with the County as a Chauffeur.
  • The County will receive a “ping,” which is a computer alert, from the Florida Department of Law Enforcement if anyone working as a Chauffeur in Broward is arrested in the state of Florida.

Vehicle Inspections

  •  All for hire vehicles must complete a 19 point vehicle inspection by an ASE Certified Mechanic once per year.

Insurance

  • State of Florida sets a minimum requirement for all vehicles for hire to be 24/7 coverage by a Standard Line Insurance Carrier, with Commercial Vehicle Insurance.
  • Broward County requires all for hire vehicles to meet state requirements for insurance.

Why was this controversial?

I feel that there is nothing particularly controversial about the vehicle inspection or background check components of the County’s decision. Yet, Uber and its defenders seem to have a problem with the insurance requirement.

Uber’s Insurance Problem

Uber and Lyft work on an insurance model where the company insures the vehicle while their app is turned on and a ride is in service. At all other times, the driver and their vehicle are only insured by the driver’s personal vehicle insurance. This model is very innovative, but it creates insurance gaps and

other problems. The insurance gap concerns the time that the driver is using the app, but hasn’t initiated a fare. During this time, the driver is working for Uber or Lyft, but if they get into an accident, they will not be covered by their company’s policy. Personal vehicle insurance policies are not written to cover drivers who are using their cars for hire. Consequently, Uber drivers and Lyft drivers risk being thrown off their personal insurance when the insurance carrier discovers that the vehicle is being used for ridesharing.

Neither Uber nor Lyft are willing to cover their drivers with commercial insurance 24/7, and the only way for a driver to meet this insurance requirement today is to purchase their own commercial vehicle insurance, which is expensive.

The Solution – Hybrid Insurance

In other states, the insurance companies have created hybrid policies for Uber and Lyft drivers. These hybrid policies are marginally more expensive than personal vehicle insurance, but they contain a lot of the benefits of full commercial insurance coverage.

I think the insurance industry needs to bring hybrid insurance to Florida.

I would also be willing to accept the combination of a driver’s hybrid insurance and Uber or Lyft’s ride insurance as satisfying the State’s insurance requirement. However, getting to this point would require a change in Florida’s insurance law to allow for the creation of hybrid insurance, and another change in the state’s for hire vehicle insurance requirement.

In Florida’s 2015 legislative session, Uber pushed hard for these changes in insurance law, but they were not successful.

Could Broward County waive the Insurance Requirement locally?

No.

This goes to the core of the bizarre nature of this controversy. Broward County cannot choose to lower State standards within its borders. We have the regulatory power to increase standards locally, but we do not have the legal authority to lower any standard set by the State.

Why regulate Uber at all?

Originally, Uber and their competitor, Lyft, claimed that neither company should be subject to regulation from the State of Florida or Broward County as they were not taxi companies. Uber and Lyft made the claim that they were merely technology companies, and that their business was licensing a smartphone app. This claim never struck me as credible. I never liked the idea that Uber and Lyft were merely technology companies because both of these companies need to have a stake in what happens to their drivers and their passengers.

Uber and Lyft might not be taxi services, but they are certainly vehicles for hire. Broward County regulates all vehicles for hire. We do not impose the same regulations on taxi cabs that we place on stretch limousines, and to that end, I felt that Broward County could include Transportation Network Carriers like Uber into our Motor Carrier Ordinance without forcing them to become taxis.

To Uber’s credit, their service fills a void in the transportation market. They have done a great job on ensuring customer satisfaction and brand loyalty since entering into this market. However, as policy makers, our job is not to simply look at how a good business operates when times are good and services work as advertised. We create regulations to ensure that when inevitable and predictable mistakes are made that the consumer is fully protected.

The Greater Challenge

Lastly, there is a larger context here. Broward County must evolve as the sharing economy continues to gain a foothold in the marketplace. Hotels, vacation rentals, delivery services, and lending institutions have started to see new challenges emerge as peer-to-peer platform service competitors grow in popularity. Air BnB, Go Fetch and Lending Club each have tremendous opportunities to revolutionize industries the way Uber and Lyft have. The challenge the County faces is how to foster competition and innovation without losing the ability to provide smart regulation and consumer protections where it is necessary. Sometimes that will mean asking businesses for more than they are willing to give, but if we set high standards early on, the results will be better in the long term.

I believe the County made the right decision with Uber. I think that we challenged this company, along with the rest of the vehicle for hire industry, to operate at a higher standard. I am confident that both Uber and the traditional taxis will rise to meet that challenge. I am happy to know that we brought a new choice to the local vehicle for hire market, and I am happier to know that these rides will be safer and better insured for our actions.

Thank you, and if you have any questions comments or concerns, please email me at bfurr@broward.org or call me at 954-357-7006.

-Beam