NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A8195B
SPONSOR: Cahill
 
TITLE OF BILL: An act to amend the insurance law, the executive law
and the general municipal law, in relation to transportation network
companies
 
PURPOSE:
To clarify insurance provisions and requirements relative to transporta-
tion network companies.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill would amend the insurance law by adding a new
section 3441 which would provide the minimum insurance limits that
transportation network companies (TNCs) must carry in their group poli-
cies and other requirements that TNCs must follow in order to operate in
the state. During the period when a TNC driver is logged onto a TNC's
network and is available to receive transportation requests, a TNC must
carry liability insurance of $100,000 for death and bodily injury per
person, $300,000 for death and bodily injury per incident and $25,000
for property damage. During the period when a TNC driver is engaged in a
prearranged ride, a TNC must carry liability insurance of $1,500,000 for
bodily injury, death and property damage. This section would also
prohibit any TNC from operating in New York City.
Section 2 of the bill would amend the insurance law by adding a new
section 3455 which would authorize the issuance of automobile insurance
policies to transportation network companies on a group basis. Each
group policy would be required to provide liability coverage, first
party benefits coverage and uninsured motorist coverage in satisfaction
of the financial responsibility requirements set forth in New York law.
This section would also provide how the coverages of a group policy will
work if a driver is using multiple apps at the same time during periods
1, 2 and 3. Additionally, this section would provide that a TNC's group
policy coverage will remain in effect when a TNC driver is transporting
a passenger from one municipality to another.
Sections 3, 4 and 5 of the bill would amend the executive law to add
transportation network company drivers to the New York Black Car Opera-
tors' Injury Compensation Fund, Inc.
Section 6 of the bill would amend the general municipal law to give
municipalities the authority to regulate the registration and licensing
of TNCs.
Section 7 of the bill would establish the effective date.
 
JUSTIFICATION:
On April 24, 2014, transportation network company (TNC) Lyft launched
operations in this state in the cities of Buffalo and Rochester. Less
than three months later the department of financial services (DFS)
issued a letter, dated July 8, 2014, that ordered Lyft to cease and
desist operations in New York mainly on the grounds that Lyft was
violating New York insurance and financial services laws.
This bill seeks to address the concerns raised by DFS and to allow TNCs
to operate in upstate New York by authorizing insurers to issue group
insurance coverage to TNCs thereby allowing such companies to purchase
and provide adequate insurance coverage for the vehicles enrolled in a
company's network. This bill also establishes the necessary insurance
coverage and other insurance-related requirements to ensure that consum-
ers and TNC drivers are adequately protected when engaged in TNC activ-
ity.
 
LEGISLATIVE HISTORY:
New bill
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.