Insurance coverage, taxes dominate first car-sharing regulation talks

Speak of insurance coverage and taxes dominated dialogue over the Legislature’s first step towards regulating peer-to-peer car-sharing providers Thursday.

The Senate Commerce Committee took testimony on a invoice sponsored by Sen. Joe Cryan (D-Union) that may require corporations administering peer-to-peer automobile sharing to tackle insurance coverage legal responsibility for automobiles rented utilizing their platform.

Automotive-sharing companies permit automobile homeowners to hire their vehicles to others after they aren’t utilizing them. These corporations — which the invoice distinguishes from automobile rental companies — already function in New Jersey, although a dearth of regulation means it’s typically unclear whose insurance coverage is on the hook following a crash.

“Now, it’s the wild, wild west. You’re suing everyone and there’s carriers denying. The place does the injured occasion go?” mentioned Sen. Jon Bramnick (R-Union).

Whereas the measure would be certain that somebody — the automobile’s proprietor, its driver, or the car-sharing agency — has insurance coverage, there was disagreement over whether or not the protection required below the invoice could be sufficient.

“Since most conventional auto insurance coverage won’t cowl a automobile pushed utilizing a peer-to-peer service, the peer-to-peer firm ought to all the time be the first insurance coverage throughout the time the automobile is being shared,” mentioned Jim Lynch, president of the New Jersey Affiliation for Justice, a authorized advocacy group.

The invoice, as written, would require car-sharing corporations to hold solely legal responsibility, private harm, and underinsured and uninsured motorist protection as much as the state’s minimal limits. Lawmakers have tried to lift a few of these limits in current months, together with a profitable push that may edge bodily harm legal responsibility protection minimums up subsequent yr and once more in 2026.

Lynch requested that car-sharing companies be required to hold not less than $1.5 million in legal responsibility protection, the identical protection required by ride-share providers like Lyft and Uber. Kenny Montilla, a lobbyist for car-sharing agency Turo, famous the invoice would bar vehicles rented by way of a car-sharing service from getting used as taxis or different for-hire automobiles.

“To talk to what we like about this invoice, it ensures there isn’t a lapse in protection, so no matter no matter occasion tries to sue, there may be protection in place that’s supplied by the shared automobile driver, the shared automobile proprietor, or the platform within the occasion that both occasion is uninsured or underinsured,” Montilla mentioned.

Bramnick stopped in need of endorsing the $1.5 million restrict however argued car-sharing companies ought to be required to supply greater than minimal legal responsibility protection.

Montilla mentioned car-rental companies are topic to the identical restrict, including that car-sharing companies supply safety plans that present extra protection.

Rental corporations, which compete instantly with car-share companies, mentioned their rivals ought to pay the identical charges and taxes levied on automobile leases as a result of they provide the identical service — even when car-share corporations attempt to declare they don’t.

“I do know you’ve in all probability heard, and perhaps you’ll hear in future testimony that the peer-to-peer corporations don’t hire vehicles,” mentioned Dean Thompson, vice chairman of finance at Enterprise Hire-A-Automotive. “I encourage you to do a Google and have a look at their Google advertisements. You will note ‘hire the proper automobile.’ You’ll see ‘immediately hire.’”

New Jersey leases are charged a $5 each day home safety charge on high of gross sales tax levies. Automotive-sharing companies pay gross sales tax however not the charge. They’re additionally exempt from airport entry charges and native taxes on automobile leases charged in Newark and Elizabeth, Thompson mentioned.

Lawmakers could discover extending charges and taxes to car-sharing corporations a troublesome capsule to swallow. Automotive leases are sometimes dearer than automobile shares, and including prices might make the newer service much less accessible for low-income residents.

“Lately, I traveled out of state, and I needed to hire a automobile for 5 days. I used one of many famous corporations which can be right here. The price for 5 days was $750, and it wasn’t an excellent luxurious automobile,” mentioned Sen. Bob Singer (R-Ocean), a invoice co-sponsor who added, “Making it inexpensive to younger folks, making it inexpensive to people who find themselves beginning out or are struggling — in these monetary instances, that is so vital.”

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