CUNA outlines TNC priorities prior to FTC workshop

May 27, 2015

WASHINGTON (5/27/15)--While many states consider legislation that would apply to transportation network companies (TNCs) such as Uber or Lyft, CUNA has written to the Federal Trade Commission (FTC) outlining its priorities and areas of concern regarding some TNC operational practices.

In particular, CUNA is concerned that credit unions receive the right statutory protections to prevent exposure to losses in their role as lienholders on vehicles used by TNC drivers.

CUNA’s comments were submitted in advance of a June 9 FTC workshop that will discuss elements of the modern “sharing” economy, including TNCs.

CUNA has encouraged states to require TNC drivers to have comprehensive and collision insurance through all three phases of TNC operation: when the app is activated, but driver and passenger are not matched; when a match is made and the driver is en route to the passenger; and when the passenger is being transported.

Currently, insurance is generally provided during the final phase, but not during the first two. Should a TNC driver get in an accident during the uncovered periods, a personal insurance policy may not cover damages and the collateral against the lien may be jeopardized.

CUNA supports state legislation that would:

  • Require drivers using personal vehicles with liens on them to provide proof to lienholders and TNCs that they have comprehensive and collision insurance that provides coverage during all periods;
  • Require coverage of at least $50,000 per person for death/bodily injury, $100,000 per incident for death/bodily injury and $25,000 for property damage during period one;
  • Require coverage of $1 million when the driver is engaged in a prearranged ride, periods two and three;
  • Require a TNC’s insurance to cover claims if a driver’s insurance lapses or does not meet the required coverage; and
  • Require TNCs to disclose to drivers that the driver’s personal insurance policy may not provide coverage when the driver is engaged in TNC activities.

Uber and several major insurance companies such as Allstate, Farmers Insurance, State Farm, Nationwide and USAA have recently announced model TNC insurance legislation. This model does not require drivers to have comprehensive and collision insurance coverage for personal vehicles with liens on them.

 CUNA is also serving as a clearinghouse for TNC legislation related expertise, guidance and other information at the state level as legislation moves forward.