Arizona House panel OKs early version of ride-hailing rules

PHOENIX (AP) — An Arizona House panel approved a bill Wednesday on new rules for the ride-hailing industry that will serve as a placeholder until talks between taxi firms, insurers and companies such as Uber and Lyft end with a final deal.

Negotiations on an updated law aim to work out a compromise that levels the playing field between the new and growing ride-hailing services and traditional taxi businesses.

Rep. Karen Fann, R-Prescott, is leading the talks and says most issues are close to being resolved, including the sticking point of how the new companies are insured.

The insurance committee Fann chairs approved House Bill 2135 on a 6-1 vote on her assurance that the panel will hear full details when a final proposal is nailed down.

Representatives from the three major players told the committee they are hopeful a final deal can be reached.

“All we ask is that all companies and drivers are treated equally, and that the public is properly protected with adequate insurance,” said Michael Pinckard, president of Glendale-based taxi operator Total Transit. “These are truly the only issues yet to be resolved.”

In addition to traditional taxi services, Total Transit also has 200 drivers for a ride-hailing service similar to Uber and Lyft.

The biggest issue is insurance coverage for ride-hailing drivers. The companies provide a large commercial policy when a passenger is in their car, but at other times, drivers operate using just their personal insurance.

Fixing that gap is the largest sticking point, insurance company lobbyist Don Isaacson testified. “I think you’ll have a wealth of options once that’s done.”

Uber’s Arizona general manager, Steve Thompson, also backs the talks.

“These industries have worked together and will continue to work together to help define a regulatory framework for this new, innovative industry,” Thompson said.

Lawmakers passed a bill last year that would have exempted the new app-based transportation companies from insurance regulations imposed on traditional taxi and livery companies. It was vetoed by then-Gov. Jan Brewer, who said it failed to protect consumers.

The companies continued to operate, and the state Weights and Measures Department had issued nearly 100 citations by November to drivers who did not have proper commercial licenses or insurance. Gov. Doug Ducey halted the policy last month, saying it wasn’t working and was hampering job creation.

The possible compromise would make both taxis and ride-hailing companies adopt zero-tolerance policies for drug use, Fann said. A deal would stop state testing of taxi drivers but pass the responsibility for maintaining anti-drug policies to companies.