Ask a simple question, get a court order to get an answer
It’s safe to say that taxi and limousine companies are wary of Uber and its transportation network company kin. It’s also safe to say that Florida’s taxi companies are not alone in their misgivings.
Uber, of course, is the company that matches passengers with drivers through its mobile app. Uber drivers use their own vehicles and make their own schedules. They are either contractors or employees, depending on which court you ask, and they are paid per ride. The business model keeps Uber’s overhead low, so the service is less expensive than taxis and limos.
State and local governments around the country have struggled with how to regulate TNCs. If the drivers are not employees, the company is under no obligation to comply with federal labor laws. There are liability issues, too: If the driver is in an accident on the way to pick up a passenger, is the company on the hook, or does the responsibility fall entirely on the driver (and his insurance)?
Auto insurance is a particularly sore subject with taxi companies. Under Florida law, for-hire passenger transportation vehicles must be covered by a qualified commercial auto insurance company at all times. “Qualified” means an insurance company that is a member of the state’s Insurance Guaranty Association, and “at all times” means 24/7. Together, they mean fairly expensive coverage, according to a lawsuit filed by two taxi companies.
The lawsuit, perhaps surprisingly, is not against Uber or any other TNC. The defendant in the case is the Florida Department of Highway Safety and Motor Vehicles.
The cab companies have asked the court to compel the FDHSMV to answer a question that to date the department has avoided, in spite of multiple requests from the for-hire transportation industry and even the city of Tallahassee.
The question? All they want to know is whether the insurance rules that taxi and limousine companies must follow also apply to the vehicles used by Uber and other TNCs.
It’s not that Uber doesn’t have insurance, though. We’ll explain more in our next post.
Source: Insurance Journal, “Florida Judge Orders State to Clarify Uber Insurance Requirements,” Amy O’Connor, Sept. 18, 2015
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