Regulation Catching Up with the Ride-Sharing Industry

By Bill Holloway

As UberSidecar, and Lyft ride-sharing services have expanded their reach into cities across the world, questions about if and how they should be regulated have followed close behind. Taxi drivers have been concerned that the new services will be unfairly advantaged if they are able to avoid the regulations that govern existing taxi services. Questions about driver background checks and insurance coverage have also loomed over the industry.

Recently, a number of U.S. cities and states have begun taking action to regulate these services in ways that allow them to operate but require them to meet licensing, registration, vehicle, and insurance requirements.

Illinois may soon have some of the nation’s tightest regulations for ride-sharing services.  The rules, which have been passed by the Senate but have not yet been signed into law by the governor, require ride-share drivers to carry the same amount of liability insurance as taxi drivers and specify that insurance policies must be in effect from the moment ride-share drivers log on to accept rides until they log off. The insurance requirements were in response to questions from insurance associations about the point when the ride-share service’s commercial insurance takes over from a driver’s personal insurance, and to prevent gaps in coverage.