On Tuesday (November 24), the Portland City Council threw out a compromise that would have required Uber, Lyft, and other “transportation network companies” to provide insurance of at least $500,000 when their drivers are looking for clients.
The deciding votes—Mayor Charlie Hales along with commissioners Dan Saltzman and Steve Novick—rejected the proposal, allowing the transport companies to work with minimal coverage and paving the way for the rise of Uber and Lyft as the dominant forces in the Portland taxi market.
The decision comes a week before the City Council adopts a new private for-hire code next Wednesday (December 2) that would compel Uber and Lyft to provide coverage of up to $2 million for claims.
If an incident occurs when a driver is seeking customers via the smartphone app, however, coverage will be $100,000 per incident and $50,000 per person for injury or death, with an additional $25,000 for damage. Uber and Lyft agreed to provide this lower coverage amount during this phase in accordance with a deal struck with leading insurance companies earlier this year.
Under the pilot project which started last April, the transport firms have gained at least 3/5ths of the market share (with Uber having the greatest percentage), a fraction that is projected to grow in the coming months.
Taxi companies and their supporters voiced protests against what they called Uber and Lyft’s attempts to shave costs by lowering their insurance coverage exactly when accident rates are highest.
Uber has experienced 95 crashes to date since its entry in the Portland market back in April. 11 of these have occurred during the passenger search phase, while 19 were when drivers are about to pick up customers. 65 have taken place when passengers were already riding.
